The Minister-designate for the newly-created Ministry of Power, Dr Kwabena Donkor, has boldly admitted that tariff on electricity could directly be affected by the cost of crude oil on the world market.
According to him, now that there is a lower price of crude oil on the world market, the cost of energy should accordingly be factored in the prices determined by the Public Utility Regulatory Commission (PURC).
The minister-designate made the admission during his incisive vetting by the Appointments Committee of Parliament yesterday.
A leading member of the Appointments Committee, Samuel Atta Akyea, had asked the minister-designate whether that was feasible because crude oil is hugely used to general electricity in the country.
Dr. Donkor said the source of fuel, turn of investment and the turn of recovery are the main determinants of cost of electricity and that ordinarily, if the cost of crude oil has seen downward trend, it should reflect in the ultimate cost of electricity to the final consumer.
To a follow-up question as to why the government is refusing to reduce prices of fuel in the country in consonance with the huge reduction in crude oil price on the world market – which is hitting a record low of $60 per barrel – so as to lessen burden on Ghanaians, the minister-designate said that question should be directed to the National Petroluem Authority (NPA) since he was not the appropriate authority to answer it.
Samuel Atta Akyea, the New Patriotic Party (NPP) Member of Parliament (MP) for Abuakwa South, had told DAILY GUIDE that his question was necessitated by the fact that although the price of crude oil keeps going down on the world market, Ghanaians are rather seeing an upward adjustment in electricity tariffs.
On a question as to why prepaid meters being installed at workplaces and homes are with different calibrations from either China or the United Kingdom thus allowing various consumers to pay different tariffs for the same amount of electricity consumed, Dr. Kwabena Donkor said when approved as the minister of power, he would discuss the issue with the Energy Commission to ensure that there is standardization to allow uniformity in tariffs.
The minister-designate also made it known to the vetting committee that even though privatisation of the Electricity Company of Ghana (ECG) and full concession were part of the conditions under the Millennium Challenge Compact, government had not made any final decision on whether to privatise part of the company or not, adding that the government would never rush to take such a decision.
He said that when he assumed office, he would rather ensure that the business structure of ECG was re-engineered to ensure efficiency and eliminate waste.
On the current power outages, commonly known as ‘dumsor’, dumsor,’ Dr. Kwabena Donkor indicated that the country is seriously under-generating electricity in relation to 72% of penetration of electricity, stressing that currently the country is producing between 1,300 megawatts and 1,800 megawatts of electricity as compared to 2,500 megawatts to 2,800 megawatts that is required to meet national need and so there would be the need to encourage investment in the generation capacity of the country.
“We need about 5,000 megawatts to 10,000 megawatts capacity generation in order to cater for redundancy or reserve for future use,” he said, adding that it was time the country looked at the production of cheap electricity from iron ore – which it has in abundance – as well as the building of alumina plant from bauxite and manganese to serve as alternative supply of cheap electricity.
As to what he was bringing on board to help solve the ‘dumsor, dumsor’ problem forever, the minister-designate said he would do bi-partisan engagements with all experts in the energy industry and other important stakeholders to find a lasting solution to the problem.
Source: Daily Guide
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