Ghana’s power sector is facing mounting financial pressure due to an increasing dependence on expensive liquid fuels, according to a new analysis by the Centre for Environmental Management and Sustainable Energy CEMSE, covering the period between 2021 and 2025.
CEMSE’S report revealed that despite projections by grid operators, the actual consumption of Heavy Fuel Oil (HFO), Diesel Fuel Oil (DFO), and Light Crude Oil (LCO) rose sharply over the period, significantly increasing operational costs within the energy sector.
According to the analysis, the actual cost of HFO surged by approximately 575 percent, exceeding grid projections by about US$68.6 million. The cost of DFO also rose by about 21 percent above projected levels, resulting in an additional US$5.5 million expenditure.
The sharpest increase was recorded in the utilization of LCO, where actual costs exceeded projections by about US$65.95 million, representing a 129 percent increase in LCO usage by the power sector in 2025.
Overall, the combined cost of HFO, DFO, and LCO for 2025 is estimated at US$229.89 million, translating into an average monthly expenditure of approximately US$19.16 million on liquid fuels.
CEMSE attributed the growing dependence on alternative liquid fuels largely to persistent shortfalls in natural gas supply for thermal power generation.
Energy analysts warn that the continued use of costly liquid fuels could worsen Ghana’s power sector debt burden and place additional strain on public finances, particularly because the procurement cost of these fuels is not fully captured within the current electricity tariff regime.
As a result, government continues to depend heavily on petroleum levies to finance fuel procurement for power generation.
The findings also highlighted the urgent need for Ghana to diversify its power generation mix, improve fuel procurement discipline, and address gas supply deficits to ensure long-term fiscal sustainability and reduce financial distress within the power sector.
Details of the report is found attached
