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05 July 2016

Tarzan rejects claims of electricity subsidies

tarzanA former CEO of the Volta River Authority (VRA) as well as a policy analyst, Dr. Charles Wrekko Brobbey, has rejected claims made by the government that it has introduced subsidies to cushion low-level consumers of electricity.

According to the government, it has also introduced additional subsidies for industries and commercial entities to help ease the burden on them with relation to utility tariffs.

Figures released by the Electricity Company of Ghana (ECG) on the new subsidies to be enjoyed, reveal that residential households who consume between zero and 150 units will enjoy government subsidy of between 0 to 4 percent while those who consume more than 150 units will enjoy nothing.

For non-residential users, those who fall within the 0 to 150 units will also enjoy between 0 and 7 percent of government subsidy.

But reacting to the latest development, Dr. Charles Wrekko Brobbey said no subsidy has been introduced.

“It is not true; you are being charged VAT, energy levies, street light among others and those have gone up from almost 1 to about 5 percent…when you say you are subsidizing something, it means you are charging below how much it costs. But here is the case that you (government) are giving with the left hand, yet you are taking with the right… It should be taken with a pinch of salt,” he noted.

Dr. Brobbey also criticized the government over what he refers to as its failure to effectively implement the lifeline tariff system that was meant to cushion some low-level consumers of electricity.

He emphasized, “I introduced lifeline tariffs, what they tried to do was to be too smart. Instead of everybody enjoying the lifeline, it was abolished for anybody who used light for more than 50 units but then even those whom it was intended for, there was no way… their consumption levels could have been below.”

Meanwhile, the Deputy Power Minister, John Jinapor has defended the move.

Speaking on the breakfast show, Mr. Jinapor explained that the subsidies are in categories and brands but will definitely bring relief to users.

The Deputy Minister also added that the government would be paying for the differences in the cost of power as a result of the subsidy.

“The commercial and industrial users will enjoy some subsidy but they are in categories and bands. So when we publish the reckon and issue the statement, it will clearly be stated. We progressively over the period want to ensure that commercial users rather pay less for the power they consume because it is for productive use and government is paying for the difference.”

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