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Ghana needs $1.1 billion to procure liquid fuel or shut down its plants
Ghana needs $1.1 billion to procure liquid fuel or shut down its plants
By: Nii Ammui Fio | 3 mins read
Ghana’s Energy and Green Transition Minister, John Abdulai Jinapor, has revealed that the government urgently requires $1.1 billion to purchase liquid fuel in order to keep the country’s power plants operating, warning that without the funds, power generation could come to a halt in just a few days.
Appearing before the Parliamentary Committee on Energy on May 15, Mr. Jinapor disclosed that the country has less than three days’ worth of liquid fuel in reserve.
“We require about $1.1 billion to procure liquid fuel alone. Unfortunately, the liquid fuel is not part of the tariff structure, and so we will be buying close to $15 billion of liquid fuel, and that has to be paid by the central government.”
The Minister stressed the urgency of the situation, saying the limited fuel stock is quickly running out.
“As I sit here, my next headache is how to get the next parcel of liquid fuel. The fuel we have would take us 2.6 days. We've placed an order for fuel, but it has to be paid. We've procured some fuel on credit and we are working with the Minister of Finance to pay, but the truth is that the Ministry of Finance also has its limit, and so we would be going to Cabinet to discuss how we can improve on the sector…”
This shortage could result in power disruptions across the country, affecting both homes and businesses. The Finance Minister, Dr. Cassiel Ato Forson, also indicated that the reliance on costly liquid fuel is a heavy burden on the economy, with over $1 billion expected to be spent on it this year alone.
In a broader move to address the energy sector’s challenges, the Energy and Finance Ministers held a meeting with key players from ECG, PURC, VRA, GRIDCo, the Energy Commission, and other stakeholders. The meeting focused on finding long-term, sustainable solutions under the Energy Sector Recovery Programme (ESRP), including improved efficiency and stable funding.
To reduce the strain on government resources, all Metropolitan, Municipal, and District Assemblies (MMDAs) have been instructed to include electricity payments in their budgets. The Energy Minister emphasized this directive:
“The Cabinet has also adopted a position, and we will brief you, chairman, that all MMDAs are supposed to pay for their electricity bills. They have to budget for it.”
However, he clarified that select institutions will still receive government support:
“If you take the health sector, it's the theatres, laboratories, the wards that would be exempted. If you take the educational institutions, dorms aren't part, and restaurants aren't part. Only lecture theaters, so we have classified that, and the cabinet is granting approval and will publish that.”
Meanwhile, power supply stability is further threatened by Karpowership’s looming shutdown over an unpaid debt exceeding $400 million. This comes after previous warnings in January and March about similar arrears, which have yet to be resolved despite high-level negotiations.
Adding to the crisis, the Electricity Company of Ghana (ECG) reportedly suffers a monthly deficit of GH₵2 billion due to inadequate revenue collection, complicating payments to Independent Power Producers (IPPs), who have also signaled the possibility of suspending operations.
In response to the systemic issues, the government is pressing forward with the construction of a second gas processing plant to strengthen fuel supply. Launched earlier this year, the project is expected to save the nation nearly $500 million and generate over 1,000 jobs. Dr. Forson has given the implementation team a four-week deadline to finalize their plan.
Despite these interventions, Mr. Jinapor stressed that private sector involvement remains vital, although not a standalone solution.
“It doesn't entirely solve the problem… it takes us to another level because if the collections are reduced from 40% to say, 5%, it means they will be collecting more.”
