Dealing with liquid fuel cost: Energy Minister proposes gas-to-power solution

The Minister of Energy and Green Transition, John Abdulai Jinapor, says the country has to transition from liquid fuel to ‘gas-to-power’ as part of measures to deal with the cost of liquid fuel.

He said the country had stranded gas that was not being utilised but spent heavily on liquid fuel.

He also stressed the need for a high level of discipline and efficiency in the energy sector and the participation of the private sector in the management of the power distribution sector, failure of which the sector would collapse.

These are measures, the minister said should be looked at to bring about improvement and efficiency in the energy sector.

Bills

“From what I am seeing, we immediately have to move into a gas-to-power era.

The liquid fuel bills alone are about $1 billion this year.

“Half of that can build a gas processing plant that will save us about $600 million per annum and so for me, that is something non-negotiable,” Mr Jinapor said during the closing of the National Economic Dialogue last Tuesday in Accra.

He said the outstanding liabilities in the energy sector stood at GH¢80 billion so far, and that that amount of money would be required in order to put the sector back on track.

“The case is increasing. GH¢80 billion is outstanding liabilities and so, today, if you were to put the energy sector back on its toes, you will have to cough up GH¢80 billion to flush out the outstanding liabilities.

Unsustainable

“Clearly, that's unsustainable. But even more worrying is the mounting liabilities. Assuming we're dealing with only GH¢80 billion, then that wouldn't be the major problem,” he said and that the “major problem is that we have a total of about GH¢175 million every month, especially in the power sector”.

Meanwhile, the collection, he said was less than GH¢100 million and that even going forward, if nothing was done, about GH¢70 million was going to be spent every month as a shortfall or a liability.

That to him, he said, was a major issue.

“We cannot use the little we have to buy the refuel. We must bring that gas processing plant home and cut the costs.

That will also cut the corruption and cut the wastage,” he said.

He said a high level of discipline and efficiency in the sector was needed to bring about efficiency in the sector.

In 2023, he said the Public Utilities Regulatory Commission (PURC) approved about $200 million as cap in terms of capital expenditure cap (capex) for the Electricity Company of Ghana and that by the end of the year, the money had increased to $700 million.

That, he said, meant that $500 million was not factored into the planning structure and so the indiscipline alone was a major factor.

A second area that needed to be looked at, he said, was the need for a private sector participation in the management of the sector.

“If we don't do that, the sector will collapse and we are headed for that collapse already. Some companies have shut their accounts today, as we speak, without payment of their bills.

“So it's something that you can't have a shortcut. You must necessarily take those tough decisions. And then, finally, from what I am seeing, we immediately have to move into a gas power area,” he said.

Dialogue

The National Economic Dialogue (NED), which was opened by President John Mahama, ended with a strong call for bold economic reforms to stabilise Ghana’s fragile economy and drive sustainable growth. 

The two-day forum, held from March 3-4, 2025 at the Accra International Conference Centre, was attended by key stakeholders, including government officials, private sector representatives, civil society organisations, traditional leaders and academics.

Participants acknowledged that the Ghanaian economy was in crisis, with multiple risks and vulnerabilities.

They noted that state-owned enterprises, particularly in the energy and cocoa sectors, continued to undermine fiscal and debt sustainability, while long-standing structural deficiencies threatened macroeconomic stability.

The dialogue was guided by the theme: “Resetting Ghana – Building the Economy We Want Together”, underscoring the need for inclusive reforms to restore investor confidence and promote economic resilience.