‘Keeping the lights on Costs $92m a month’ – PURC boss reveals hidden power bill

The Executive Secretary of the Public Utilities Regulatory Commission (PURC), Dr Shaffic Suleman, has revealed that the Government of Ghana spends an average of US$92 million every month in addition to electricity tariff revenues to sustain power generation and ensure a stable electricity supply across the country.

Speaking on JoyNews' PM Express Business Edition on Thursday, Dr Suleman said the Ministry of Finance continues to provide substantial financial support to the energy sector to cover the cost of fuel, settle legacy debts, and prevent disruptions to electricity supply.

According to him, while consumers pay electricity tariffs, those revenues alone are insufficient to keep the country's power sector operational.

Dr Suleman disclosed that proceeds from the recently introduced GH¢1 levy on petroleum products have already been utilised to address longstanding financial challenges in the energy sector.

He explained that a report submitted by the Ministry of Finance to Parliament indicates that approximately GH¢8 billion has been raised through the levy and channelled into critical interventions.

"A report from the Finance Ministry indicates that the GH¢1 on the petroleum products that was passed has been used," he stated.

The PURC Executive Secretary said the funds have helped settle a significant portion of outstanding payments owed to Independent Power Producers (IPPs), easing financial pressures that had threatened electricity generation.

Dr Suleman further revealed that part of the funds had been used to restore risk guarantees associated with the Sankofa Gye Nyame gas project, a major source of natural gas for Ghana's thermal power plants.

He noted that government had also cleared debts that had negatively affected Ghana's credit profile.

"We've also used some of it to pay to get back the risk guarantees on the Sankofa Gye Nyame gas production, and then we've also paid off the accumulated debt that was putting Ghana's credit rating at a very terrible outlook," he explained.

According to him, Ghana has successfully restored the World Bank risk guarantee backing ENI's operations, a development expected to strengthen investor confidence and improve the country's international credit standing.

"So it's now making Ghana look so good, and our credit rating has also taken shape," he added.

Dr Suleman said part of the resources has also gone into settling obligations owed to key gas suppliers, including partners involved in the Sankofa and Jubilee oil and gas fields.

The timely payments, he explained, are crucial to ensuring continuous gas supply for electricity generation.

"We are using all that for the accounts I've seen to pay and sustain that part, and that's actually what is keeping the light on," he stressed.

Responding to questions about the sector's debt burden, Dr Suleman acknowledged that the government's intervention has significantly reduced outstanding liabilities.

"Yes! It dropped the debt significantly. Now that's what I'm saying, it's not a debt-debt. So the government had to go and borrow to come and sustain the power sector," he said.

He noted that despite the progress made, the sector still requires continuous financial support because the actual cost of power generation exceeds revenues collected through electricity tariffs.

Dr Suleman explained that maintaining uninterrupted electricity supply throughout the year demands substantial monthly financial injections from the Ministry of Finance.

According to him, government currently provides an average of US$92 million every month to cover fuel costs and other operational expenses that are not recovered through consumer tariffs.

"Every year, before our lights can be kept on consistently for 12 months, the Ministry of Finance must cough up money to ensure that we pay for the cost of all these fuels," he stated.

"So every month on average is US$92 million. As we speak, it's US$92 million. So when you see your lights on for 30 days, what it means is that aside the tariff we are paying, the Ministry of Finance is also putting in US$92 million to make the lights come on."

His remarks underscore the significant financial burden government continues to bear to sustain Ghana's electricity supply while balancing the need to protect consumers from the full cost of power generation.