The Africa Centre for Energy Policy (ACEP) has welcomed an agreement by countries in the West Africa sub-region to a $1.7 tariff for each standard cubic feet of gas transported to Ghana.
According to the Executive Director of ACEP, Benjamin Boakye the rate is laudable and would reduce the burden on power production within the sub-region.
In an interview with JoyBusiness, Mr Boakye said, “It is good to note that at least from an initial discussion of about $5 they pushed it to $3 and now is $1.7 which has been signed. That is good for us and it ensures that we do not compound the power challenges because once the price is so high it has to be fed into the tariff.”
Mr Boakye added that “Anybody going to the market to purchase any product, you want the cheapest price possible, so government wanted to negotiate a cheaper price for gas transportation and if you have a cheaper transportation tariff it influences how much you can charge even for power generated and any other industry that is using it the gas.
So you don’t really need the justification what you need is to make sure that you get the cheapest price possible for transporting gas and I think that is what has really delayed the discussions or negotiations.”
Ghana agreed to consider the new tariff proposal by the West Africa Gas Pipeline Authority. The rate which has been adjusted downwards from $5 to $1.7 per standard cubic feet of gas has been considered after a series of deliberations between Energy Ministers of the West African sub-region.
Initially, Energy Minister Peter Amewu urged WAPCo to consider $1 for each standard cubic feet of gas transported to Ghana; a price he termed as very competitive.
The new tariff is expected to take effect in 2019.