We need about 1.1 billion dollars to procure liquid fuels alone- Jinapor reveals
The Minister of Energy and Green Transition, John Abdulai Jinapor, has issued a stark warning about an impending nationwide power crisis in Ghana.
Speaking before the Parliamentary Committee on Energy on May 15, he revealed that the country currently holds less than three days’ worth of liquid fuel to run its electricity-generating plants.
Minister Jinapor emphasized the urgency of the situation, stating that the Ministry is urgently seeking $1.1 billion to purchase additional liquid fuel.
He said “We require about 1.1 billion dollars to procure liquid fuels alone. Unfortunately, and the PURC is here, the liquid fuel is not part of the tariff structure”.
Jinapor added “And so you would be buying close to 15 billion dollars of liquid fuel and that has to be paid by the central government because it’s not part of the tariff structure”.
He explained that while some fuel has been procured on credit, immediate payment is essential to avoid a halt in power generation.
He detailed the financial challenges facing the energy sector, noting that the government has spent over 24 billion cedis this year on subsidies and shortfalls, with the total shortfall expected to exceed 30 billion cedis.
He explained“This year alone, government spent over 24 billion cedis in energy sector, either you call it subsidies, under-recoveries or shortfalls.
“This year it is estimated at over 30 billion in terms of the shortfall”.
The Minister also highlighted the issue of reserve margins-extra capacity needed to maintain power supply stability during maintenance or unexpected outages-which are similarly excluded from tariffs.
Additionally, the Electricity Company of Ghana (ECG) is facing a monthly collection deficit of about 2 billion cedis, further straining the sector’s finances.
Jinapor revealed “More importantly, the tariff itself, ECG is unable to collect all the monies. And so you’re 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 added.
Jinapor revealed that debts to Independent Power Producers (IPPs) have reached 1.7 billion dollars, with KarPower threatening to shut down its plant by May 18 due to unpaid bills exceeding 400 million dollars.
“KarPower has just sent us a letter that by 18th they will shut down the plant because we owe them more than 400 million dollars.
“IPPs alone, we owe them 1.7 billion dollars. And so it’s serious”, he noted.
Source: www.kumasimail.com /Kwadwo Owusu
