Ghanaian electricity consumers may have overpaid an estimated GHS1.5 billion in the fourth quarter of 2025 due to inflated exchange rate and inflation assumptions used in tariff calculations, according to a policy review by the Centre for Environmental Management and Sustainable Energy (CEMSE).

The report argues that current economic conditions justify a double-digit reduction in electricity tariffs — potentially around 11 percent — in the first quarter of 2026.

At the centre of the concerns is the methodology adopted by the Public Utilities Regulatory Commission (PURC).

For Q4 2025, PURC applied a projected exchange rate of GHS11.9735 to the dollar, which was further adjusted to GHS12.3715 to account for under-recovery claims.

However, CEMSE notes that the actual average exchange rate for the period stood at GHS10.8733 to the dollar — a difference the report describes as an over-recovery of GHS1.1002 per dollar.

When applied to total quarterly electricity consumption of 6,459 gigawatt-hours — assuming 60 percent of generation costs are dollar-denominated — the think tank estimates that consumers may have paid approximately GHS1.5 billion in costs utilities did not ultimately incur.

The review also identified discrepancies in inflation assumptions.

While PURC used an annual inflation rate of 12.43 percent in its Q4 model, the actual average inflation for the quarter was 6.6 percent — nearly half the projected figure.

Despite multiple tariff increases in 2025, revenue performance at the Electricity Company of Ghana (ECG) has remained unstable.

ECG reportedly recorded about GHS1.4 billion in revenue in April 2025 before the first round of increases.

Revenue declined to GHS1.3 billion in May after a 14.75 percent hike, rose to GHS1.6 billion in June, and fell again to GHS1.3 billion in August despite further upward adjustments.

CEMSE contends that with the exchange rate now around GHS10.99 to the dollar and projected Q1 2026 inflation at 3.4 percent, failure to implement a significant tariff reduction would undermine the credibility of the quarterly tariff review mechanism.

The group is urging regulators to formally recognise any over-recoveries and credit consumers accordingly before introducing new tariff adjustments.

It warns that inaction could erode public confidence in the regulatory framework and place additional financial pressure on households and businesses.