CEMSE Report Claims Ghanaian Electricity Consumers Overpaid GH¢1.5 Billion in Q4 2025 Due to Inflated Exchange Rate and Inflation Assumptions
A new policy review by the Centre for Environmental Management and Sustainable Energy (CEMSE) has alleged that Ghanaian electricity consumers overpaid approximately GH¢1.5 billion in the fourth quarter of 2025, attributing the excess to overstated exchange rate and inflation projections used by the Public Utilities Regulatory Commission (PURC) in tariff calculations.
The report, released amid ongoing debates on electricity pricing, contends that PURC’s methodology led to significant over-recovery by utilities, and argues that prevailing economic conditions now justify a double-digit tariff reduction—potentially around 11%—in the first quarter of 2026.
Key Discrepancies Highlighted
At the heart of the issue is PURC’s use of a projected exchange rate of GH¢11.9735 to the US dollar for Q4 2025, which was further adjusted upward to GH¢12.3715 to accommodate under-recovery claims from previous periods. In reality, the average exchange rate for the quarter stood at GH¢10.8733 to the dollar—creating an over-recovery of GH¢1.1002 per dollar.
CEMSE applied this differential to total quarterly electricity consumption of 6,459 gigawatt-hours, assuming 60% of generation costs are dollar-denominated. The result: consumers bore an estimated GH¢1.5 billion in costs that utilities did not actually incur due to the stronger-than-forecasted cedi.
A similar gap appeared in inflation assumptions. PURC built its Q4 tariff model on a projected annual inflation rate of 12.43%, while the actual average inflation for the quarter was only 6.6%—nearly half the assumed figure. This mismatch further contributed to inflated tariffs, according to the analysis.
Revenue Volatility at ECG Despite Tariff Hikes
The report also pointed to inconsistent revenue performance at the Electricity Company of Ghana (ECG) despite successive tariff increases. Monthly collections showed:
April 2025: ~GH¢1.4 billion (pre-hike baseline)
May 2025: ~GH¢1.3 billion (after 14.75% increase)
June 2025: ~GH¢1.6 billion
August 2025: ~GH¢1.3 billion (despite further adjustments)
CEMSE argued that these fluctuations suggest demand sensitivity and limited revenue gains from price hikes, reinforcing the case for downward adjustment when input costs fall.
Current Conditions and Call for Action
With the cedi now trading around GH¢10.99 to the dollar and projected Q1 2026 inflation at just 3.4%, CEMSE maintains that failure to implement a meaningful reduction would undermine the credibility of PURC’s quarterly tariff review mechanism.
The group called for:
Formal recognition and crediting of over-recoveries to consumers before any new adjustments.
A significant tariff cut in Q1 2026 to reflect actual lower costs.
Greater transparency in the forecasting and adjustment process.
CEMSE warned that inaction could erode public trust in the regulatory framework, intensify financial pressure on households and businesses already grappling with high living costs, and fuel perceptions of unfairness in the electricity pricing regime.
Neither PURC nor the Ministry of Energy had issued an official response to the CEMSE report as of February 23, 2026. The findings add to growing scrutiny of tariff-setting practices amid calls for relief from consumer groups, civil society, and opposition politicians.
The quarterly tariff review process, intended to pass through changes in fuel prices, exchange rates, and inflation, remains a contentious issue, with stakeholders watching closely for PURC’s next announcement on electricity and water tariffs.
