The NDC government’s justification for recent electricity tariff hikes, such as those implemented in Ghana in 2025 and early 2026, do not conform to the principles of power generation in engineering. The reasons to which the tariff increases are attributed are deceptive, irrational and insensitive, notwithstanding conditionalities imposed on Ghana by the International Monetary Fund under our extended credit facility.
I make this argument based on the following 11 facts.
Fact 1: As of late 2024-25, Ghana’s total power generation capacity constituted approximately 70% of thermal power generation, with over a dozen major plants (including IPPs), providing the bulk of the power. Under this arrangement, fuel prices for natural gas, coal and oil directly affect the variable cost of generation.
Now, a thermal plant is a power station that converts heat energy into electricity, typically by burning fuels such as coal, gas or nuclear fuel to boil water, create high-pressure steam and spin a turbine connected to a generator.
Fact 2: The principle of electricity tariff increases with regard to thermal plants is driven primarily by the need for cost reflectivity, ensuring that the high, often volatile or variable fuel costs and fixed operating expenses are recovered, so as to prevent power supply deficits.
Fact 3: In areas heavily dependent on thermal power, as in the case of Ghana, these increases are designed to pass on rising costs of natural gas, fuel and foreign exchange depreciation directly to consumers to maintain the financial viability of power generators.
* Fact 4: In January 2026, the Public Utilities Regulatory Commission (PURC) implemented a 9.86% upward adjustment in electricity tariffs for all customer categories, following a new multi-year tariff review.
* Fact 5: This increase followed a series of quarterly adjustments in 2025, which included a 14.75% hike in the second quarter and a 1.14% increase on 1 October, 2025 with a justification that there is a need to maintain financial stability for service providers.
* Fact 6: Again, the government’s justification for the 2026 hike was that it aims to cover capital and operational expenditures for utilities over the next five years.
* Fact 7: The global market crude oil price in December 2025 averaged roughly $60 per barrel, which is $11 per barrel lower than the ($74) average price in December 2024.
* Fact 8: The projections for 2026 suggest a further decrease in average crude oil prices globally, with forecasts putting crude oil at around $52-$56 per barrel, due to rising global production and weak demand growth.
* Fact 9: As of July 2025, the NDC government, acting through the Ghana Revenue Authority (GRA), implemented a new GHC1 per litre fuel levy on petrol and diesel at the pump. Ghanaians were told that the aim with this levy is to generate roughly GHC5.7 billion annually to settle debts owed to independent power producers and to ensure stable power supply (avert “dumsor”).
* Fact 10: Ghana’s inflation fell from 23.5% in December 2024 to 3.8% in January 2026, the lowest since 2021, in the 13th consecutive monthly decline.
* Fact 11: IMF data shows that the cedi appreciated by over 40% against the US dollar in 2025.
*Now here are the questions …*
Question 1: If an electricity tariff increase is linked directly with a corresponding increase in fuel prices, why must Ghanaians continue to experience constant hikes in electricity tariffs with fuel prices unabatedly decreasing globally in the last 12 months? This totally defies the logics and principles of power generation in engineering.
Question 2: When the local currency (cedi) weakens against major currencies such as the US dollar, it automatically affects fuel prices locally and operating costs for power utilities, especially thermal power plants, which usually leads to upward adjustments in electricity tariffs. However, the Ghanaian local currency (the cedi) is on record to have appreciated, consistently and significantly, against the dollar in the past 12 months.
So, why must Ghanaians continue to see constant increases in electricity and other utility tariffs?
Question 3: If the government has implemented a GHC1 per litre fuel levy on petrol and diesel, aimed at generating roughly GHC5.7 billion annually to settle debts owed to independent power producers, this should totally decrease the rate at which the electricity tariffs increase. Unfortunately, the opposite is what Ghanaians are seeing. Why?
Now, juxtaposing all the indicators or factors mentioned, the logical conclusion by any critical power expert is that there must be no persistent increase in electricity tariffs, but rather that one should expect reduced rates, or stable tariffs.
We all know now that electricity has become a fundamental and indispensable resource for modern human life. As an engineer specialising in electrical power generation, transmission and distribution, I believe that the utility providers must cover their operational expenses, maintain infrastructure and remain financially viable to avert any catastrophic power outages and ensure reliable service delivery. However, I do not subscribe to the government’s bullying tactics and deceptive means to collect money from ordinary Ghanaian citizens, knowing that they have no other choice than to pay exorbitant electricity tariffs.
My recommendations to the government
In order to reduce overdependence on independent power producers (IPPs), which currently contribute over 50% of power generation in Ghana, creating significant financial burdens and energy insecurity with potential risks of operational cutbacks because of accumulated debts, which can lead to power shortages, industrial downtime and diminished investor confidence.
I would strongly recommend that every government target to generate at least 2000MW in addition to the national grid within its four-year tenure and, by so doing, expand the state-owned power generation capacity.
This paradigm shift would enhance energy security in Ghana, reduce excessive capacity payments and ensure more stable, affordable energy supply and use, which will assist Ghana to bargain effectively on prices with the IPPs.
By Ing Peter Antwi Boasiako
The author is a former deputy director general of the Commission for Technical and Vocational Education and Training (CTVET) and a high-voltage engineer by profession. He is also an energy expert
