Jinapor States $800 Million Needed for Fuel to Operate Thermal Plants

John Jinapor, the Minister for Energy and Green Transition, has revealed that the Ghanaian government is expected to spend over $800 million on liquid fuels in 2025 to power the country’s thermal plants. According to Jinapor, this expenditure is not sustainable and could place considerable strain on the nation’s financial resources if alternative energy solutions are not put in place.

In his address to Parliament on Wednesday, March 12, 2025, Jinapor underscored the urgency of taking proactive steps to establish a new gas processing plant, which he believes would significantly reduce the country’s dependence on costly liquid fuels. He pointed out that the current financial outlay required for thermal power generation is unsustainable and that long-term solutions are needed to ensure the stability of the energy sector.

Jinapor stressed that, without strategic interventions such as the establishment of a gas processing facility, Ghana’s electricity generation costs would remain high, placing an increasing burden on consumers and stifling industrial growth. According to the minister, the rising costs of electricity have the potential to harm the economy, as industries could face higher operational costs, which may deter investment and reduce competitiveness.

“This year alone, we are projected to spend around $800 million just to procure liquid fuels for our thermal plants,” Jinapor said. “If we had already established a gas processing plant, we could save $400 million of that expenditure annually. That’s a significant amount that could be reinvested into the economy or used to reduce the burden on consumers.”

Jinapor highlighted the potential benefits of developing a domestic gas processing infrastructure. By processing local natural gas, Ghana would not only cut down on the importation of expensive liquid fuels but also strengthen its national currency. The reduced dependence on foreign fuel sources would help stabilize the economy by reducing the outflow of foreign exchange. Additionally, processing domestic gas would provide more affordable and sustainable fuel options for the energy sector.

The government’s current reliance on liquid fuels has led to increased costs, with significant amounts of foreign exchange being spent on importing fuels for thermal generation. Jinapor emphasized that the country’s overreliance on imported fuel sources has been a persistent challenge for the energy sector, as global fuel prices fluctuate and the costs of imports continue to rise.

One of the key advantages of establishing a domestic gas processing plant is that it would provide more stability in energy pricing. Local gas, which would be cheaper to process and transport, could be used to replace liquid fuels, thereby lowering the overall cost of power generation. These savings could be passed on to consumers, making electricity more affordable and alleviating the financial burden on households and businesses.

Furthermore, Jinapor highlighted that diversifying the country’s energy mix is essential for long-term energy security and sustainability. While natural gas remains a vital source of fuel for Ghana’s thermal plants, incorporating renewable energy sources such as solar, wind, and hydroelectric power into the energy mix would help reduce the country’s reliance on fossil fuels. This approach aligns with the global push towards cleaner, greener energy, and would contribute to the nation’s efforts to reduce its carbon footprint.

In addition to enhancing energy affordability, Jinapor pointed out that investing in renewable energy and domestic gas processing would create new opportunities for job creation, technology development, and innovation within the energy sector. The establishment of new infrastructure and the expansion of renewable energy projects would provide numerous employment opportunities and stimulate economic growth.

In conclusion, Jinapor’s statements reflect the government’s commitment to addressing the challenges facing the energy sector in Ghana. By investing in a domestic gas processing plant and expanding the country’s renewable energy capacity, Ghana could reduce its reliance on expensive liquid fuels, lower electricity costs for consumers, and create a more sustainable and resilient energy system. However, the minister’s call for immediate action highlights the pressing need for collaborative efforts to secure the future of the country’s energy sector and ensure that Ghana’s energy needs are met without jeopardizing the nation’s financial stability.