CEMSE Estimates GHS 1.5bn Electricity Tariff Over-Recovery in Q4 2025, Calls for 11% Cut
Ghanaian electricity consumers may have overpaid about GH¢1.5 billion in the fourth quarter of 2025 due to inflated exchange rate and inflation assumptions used in tariff setting, according to a policy review by the Centre for Environmental Management and Sustainable Energy (CEMSE).
The think tank argues that prevailing macroeconomic conditions support a double-digit reduction in electricity tariffs, estimating a potential 11 percent cut in the first quarter of 2026.
At the heart of CEMSE’s concerns is the tariff-setting methodology adopted by the Public Utilities Regulatory Commission (PURC). For Q4 2025, the regulator applied a projected exchange rate of GH¢11.9735 to the US dollar, which was subsequently adjusted upward to GH¢12.3715 to reflect under-recovery claims by utilities.
However, CEMSE notes that the actual average exchange rate for the quarter was GH¢10.8733, implying an over-recovery of GH¢1.1002 per dollar.
Applying this differential to total quarterly electricity consumption of 6,459 gigawatt-hours, and assuming that 60 percent of generation costs are dollar-denominated, the report estimates that consumers paid roughly GH¢1.5 billion for costs that utilities did not incur.
The review also points to significant discrepancies in inflation assumptions. While PURC used an annual inflation rate of 12.43 percent in its Q4 tariff model, actual average inflation for the quarter stood at 6.6 percent, almost half the projected level.
Despite repeated tariff increases, CEMSE notes that revenue performance at the Electricity Company of Ghana (ECG) has remained unstable. ECG recorded approximately GH¢1.4 billion in revenue in April 2025 before the first round of adjustments. Revenue declined to GH¢1.3 billion in May following a 14.75 percent tariff hike, rose to GH¢1.6 billion in June, but fell again to GH¢1.3 billion in August despite further increases.
According to CEMSE, with the exchange rate currently around GH¢10.99 to the dollar and projected inflation for Q1 2026 at 3.4 percent, failure to implement a meaningful tariff reduction would undermine the credibility of the quarterly tariff review mechanism.
The group is calling for formal recognition of over-recoveries and their crediting to consumers before any new tariff adjustments are introduced, warning that inaction could erode public confidence in the regulatory framework and intensify cost pressures on households and businesses.
