Ghana was left with 2.6 days of fuel for power generation

The Minister of Energy and Green Transition, John Jinapor has said Ghana was left with just 2.6 days of fuel for power generation.

However, he said with the support of the Ministry of Finance, some fuel have been purchased and 450,000 barrels are expected this weekend.

He was speaking at a meeting with the Parliamentary Select Committee on Energy on Thursday.

The Minister had told the Parliamentary Committee that Ghana urgently needs about US$1.1 billion to procure liquid fuel to keep power plants running, warning that the country risks a shutdown if immediate funding was not secured.

The Minister indicated that “we have 2.6 days of fuel left” and also added “fortunately, we have procured 450,000 barrels of fuel and it is arriving this weekend.”

“And so, yes, well, it is true that we have 2.6 days of stock, the good news is that we have 450,000 barrels coming in. And so we shouldn’t panic. We would be okay”, the minister clarified and said there was no looming power crisis.

According to him, over $1.7 billion is owed to Independent Power Producers (IPPs), and an urgent $1.1 billion is needed to procure liquid fuel for power generation.

Mr Jinapor stated that the financial strain is so severe.

“We require about $1.1 billion to procure liquid fuel alone,” he disclosed.

“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.”

He further warned that Karpower, one of the country’s major power producers, has threatened to shut down its plant if the government fails to settle an outstanding debt.

“Karpower has just sent us a letter that by 18th, they will shut down the plant because we owe them more than $400 million. IPPs alone, we owe them $1.7 billion, and so it’s serious,” the Minister stressed.

John Jinapor, has said Ghana urgently needs about US$1.1 billion to procure liquid fuel to keep power plants running, warning that the country risks a shutdown if immediate funding is not secured.

According to him, over $1.7 billion is owed to Independent Power Producers (IPPs), and an urgent $1.1 billion is needed to procure liquid fuel for power generation.

The minister explained that the financial strain was so severe such that “We require about $1.1 billion to procure liquid fuel alone.” disclosed.

“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.”

He further warned that Karpower, one of the country’s major power producers, has threatened to shut down its plant if the government fails to settle an outstanding debt.

“Karpower has just sent us a letter that by 18th, they will shut down the plant because we owe them more than $400 million. IPPs alone, we owe them $1.7 billion, and so it’s serious,” the Minister stressed.

Mr Jinapor outlined several factors exacerbating the financial shortfall, including the lack of a reserve margin in the tariff structure and persistent shortfalls in collections by the Electricity Company of Ghana (ECG).

“ECG is unable to collect all the monies, and so you are having a deficit of about 2 billion cedis every month when it comes to ECG’s collections. When you add that deficit and you add the fuel, which is not part of the pass-through, you are looking at over 30 billion,” he said.