- PURC Holds Electricity and Water Prices Through December as Hydro Output Rises
Ghana’s utility regulator has kept electricity and water tariffs unchanged for the final quarter of 2026, after lower natural gas costs and an improved generation mix offset the impact of a weaker cedi and rising inflation.
The Public Utilities Regulatory Commission approved a zero per cent adjustment for the period from October 1 to December 31, meaning households and businesses will continue paying the electricity and water rates applied during the third quarter.
The decision provides consumers with three months of price stability at a time when the cedi’s depreciation, rising transport costs and higher non-food inflation are placing renewed pressure on household budgets and business expenses.
“The existing electricity and water tariffs of the third quarter have not changed, but remain the same in the fourth quarter,” PURC said.
Eric Obutey, Director of Research and Corporate Affairs at the Commission, said consumers would “continue to pay the amount that they were paying in the third quarter there is no increment in both electricity and water tariffs for the fourth quarter of 2026”.
The immediate relief, however, does not mean the underlying financial pressures in Ghana’s power and water sectors have disappeared.
PURC’s decision represents a balance between consumer protection and the need to preserve the financial viability of utility companies whose costs remain exposed to foreign exchange, fuel prices, inflation and infrastructure requirements.
The Commission applied a weighted average exchange rate of GH¢11.5646 to the US dollar in determining tariffs for the fourth quarter, compared with GH¢11.2228 during the third quarter.
The movement represents a 3.04 per cent depreciation in the exchange-rate variable used for the tariff calculation.
Inflation also moved unfavourably. PURC applied an average annual inflation rate of 4.97 per cent, compared with 3.43 per cent in the preceding quarter.
Both variables would ordinarily create upward pressure on electricity and water charges.
The power sector relies on imported equipment, spare parts and services, while some of its fuel and financial obligations are denominated in foreign currency. A weaker cedi can therefore increase the domestic cost of generating, transmitting and distributing electricity.
Inflation similarly raises operating expenses, including maintenance, chemicals, transportation, labour and other inputs required by electricity and water providers.
The tariff freeze indicates that PURC found enough savings elsewhere in the cost structure to absorb these adverse movements without requiring consumers to pay more.
Natural gas costs declined during the review period. PURC applied a weighted average cost of gas of US$7.8379 per million British thermal units, down from US$7.9708 per MMBtu in the third quarter. This represented a decline of 1.67 per cent.
Natural gas is a critical input for Ghana’s thermal power plants, making changes in its cost an important determinant of electricity tariffs.
The projected electricity generation mix also shifted modestly in favour of hydroelectric power.
Hydro generation is expected to increase from 20.90 per cent of the power mix in the third quarter to 24.25 per cent in the fourth. Thermal generation is projected to decline from 79.10 per cent to 75.75 per cent.
That change has economic significance.
Ghana’s heavy reliance on thermal generation exposes electricity prices to gas and liquid-fuel costs as well as exchange-rate movements. When hydroelectric production increases, the system can reduce its reliance on more expensive thermal generation and obtain some protection from fuel-market volatility.
“The overall impact of the above factors of hydro-thermal generation mix, Ghana cedi-US dollar exchange rate, inflation rate and natural gas price on electricity tariff determination led the Commission to arrive at a decision not to adjust electricity tariffs for the fourth quarter of 2026,” PURC said.
The regulator’s calculation shows the two-way character of Ghana’s quarterly tariff mechanism. A weaker currency and higher inflation do not automatically result in an increase if generation costs and operational variables move sufficiently in the opposite direction.
The decision gives Ghanaian businesses greater cost predictability during the final three months of the year.
Manufacturers, mining companies, hotels, retailers and other commercial users can be particularly sensitive to changes in electricity tariffs. Power costs affect production margins, competitiveness and the prices ultimately charged to consumers.
A fourth-quarter increase would have added another expense at a time when companies are already managing higher transport costs, wages, borrowing costs and imported-input prices.
The freeze removes one immediate source of inflationary pressure. For households, it means the cedi’s depreciation will not automatically produce higher regulated electricity and water bills during the quarter.
However, tariff stability does not guarantee that consumers’ total utility payments will remain unchanged. Bills will still depend on consumption, metering accuracy, applicable customer categories and any outstanding balances.
Consumers will also expect the tariff freeze to be accompanied by reliable electricity and water services.
PURC said it would continue monitoring regulated providers against established standards and benchmarks to promote value for money and improved service delivery.
Keeping tariffs unchanged protects consumers but places greater pressure on utilities to improve efficiency and revenue collection.
Electricity and water providers require sufficient revenue to purchase fuel, maintain networks, replace ageing equipment, expand infrastructure and meet their obligations to suppliers.
If approved tariffs do not fully cover efficient operating costs, the shortfall can appear as delayed maintenance, unpaid obligations, government support or the accumulation of debt elsewhere in the energy value chain.
Ghana entered 2026 with a significant electricity tariff adjustment already embedded in the system.
PURC initially increased electricity tariffs by 9.86 per cent under the 2026–2030 Multi-Year Tariff Order. It subsequently reduced tariffs by 4.81 per cent in April as macroeconomic and generation conditions improved.
In July, electricity tariffs increased by 3.49 per cent, while water tariffs rose by 0.85 per cent.
The sequence demonstrates that the quarterly mechanism can produce reductions, increases or stability depending on the underlying variables.
PURC says the reviews are intended to preserve the real value of tariffs, ensure utility providers remain financially viable and take account of the welfare of consumers.
That balancing exercise becomes more difficult when the cedi weakens while public tolerance for further utility increases remains limited.
Dr Obutey said electricity and water providers had made some progress in reducing system losses and strengthening revenue mobilisation.
According to him, Ghana Water Company’s non-revenue water had declined from more than 50 per cent to about 46–47 per cent.
Electricity Company of Ghana’s total losses had also decreased from more than 30 per cent to approximately 26–27 per cent. ECG’s technical losses reportedly stood at 9.8 per cent, compared with PURC’s 10 per cent technical-loss benchmark.
The company’s revenue collection had increased from less than GH¢1bn to between GH¢1.4bn and GH¢1.5bn, although this remained below its estimated GH¢2bn annual revenue requirement set by the regulator.
The improvements provide some support for the tariff freeze, but the remaining gaps are substantial.
Commercial losses caused by illegal connections, non-payment and weaknesses in billing and collection continue to undermine the finances of the utility companies.
If tariff increases are to become less frequent, the utilities will need to collect more of the revenue already due, reduce losses and improve procurement and operational discipline.
Otherwise, keeping prices unchanged may provide only temporary consumer relief while financial liabilities accumulate elsewhere in the system.
The increased contribution from hydroelectricity provides a useful buffer against fuel costs, but it is not guaranteed to continue.
Hydro output depends on water levels and hydrological conditions. A deterioration in reservoir inflows could require the system to rely more heavily on thermal plants, increasing demand for natural gas or liquid fuels.
Natural gas prices could also rise in a subsequent review, while further cedi depreciation would increase the domestic cost of foreign-currency obligations.
The fourth-quarter decision must therefore be viewed as a snapshot of current conditions rather than a permanent change in Ghana’s utility-pricing policy.
The same variables that supported the tariff freeze could move against consumers during the next review.
For the water sector, unchanged tariffs offer similar relief but do not eliminate the need for investment in production, treatment and distribution infrastructure.
Reducing non-revenue water will be critical. Water that is produced but lost through leaks, illegal connections or billing failures imposes costs without generating the revenue needed to maintain the system.
PURC’s decision represents a delicate compromise. Consumers receive protection from another utility-price increase, while service providers are expected to operate within existing tariffs despite a weaker cedi and higher inflation.
The viability of that compromise rests on lower gas costs, a larger hydroelectric contribution and improvements in utility revenue collection.
For the fourth quarter, PURC has concluded that these favourable factors are sufficient to offset the adverse movement in the exchange rate and inflation.
Whether tariff stability can extend beyond December will depend on the cedi, fuel costs, inflation, hydrological conditions and the operational efficiency of the utilities.
The freeze gives Ghanaian households and businesses a reprieve. But it also reinforces a deeper reality in the country’s energy economy: affordable tariffs cannot be sustained by regulatory decisions alone.
They ultimately depend on reducing losses, collecting revenue, improving the generation mix and ensuring that the cost of inefficiency is not repeatedly transferred either to consumers or the state.
