A new analysis by the Centre for Environmental Management and Sustainable Energy (CEMSE) has raised concerns over Ghana’s increasing dependence on expensive liquid fuels for power generation, warning that persistent shortfalls in natural gas supply are worsening the financial burden on the energy sector.

The report, authored by Benjamin Nsiah, examined the utilization of Heavy Fuel Oil (HFO), Diesel Fuel Oil (DFO), and Light Crude Oil (LCO) between 2021 and 2025 and highlighted a sharp rise in fuel consumption and associated costs.

According to the report, thermal generation continues to dominate Ghana’s electricity sector, accounting for about 70 percent of dependable generation capacity as of 2025.

Most thermal plants rely primarily on natural gas, with liquid fuels serving as backup options during planned and unplanned gas supply disruptions.

CEMSE noted that although liquid fuels are strategically important during gas shortages, they are significantly more expensive than natural gas and continue to expose the power sector to mounting debt.

The analysis showed that Heavy Fuel Oil usage for power generation surged dramatically in 2025, reaching about 133,237 metric tonnes compared to just 12,736 metric tonnes in 2024, representing an increase of about 947 percent.

Using cost estimates from the Ghana Grid Company Limited (GRIDCo), the report estimated that the total cost of HFO consumed in 2025 amounted to approximately US$80.6 million.

The report also revealed a sharp increase in the use of Diesel Fuel Oil.

After recording virtually no consumption in 2021 and 2022, DFO usage climbed significantly in 2025, with total estimated costs reaching US$32.39 million.

In addition, expenditure on Light Crude Oil imports for thermal plants reportedly rose from US$36.57 million in 2024 to about US$116.8 million in 2025, representing a 210 percent increase.

CEMSE indicated that the combined cost of HFO, DFO, and LCO for the power sector in 2025 stood at an estimated US$229.89 million, averaging about US$19.16 million in monthly expenditure.

The report attributed the growing dependence on liquid fuels to persistent natural gas supply deficits and warned that the situation poses a serious threat to the financial sustainability of the power sector.

According to CEMSE, most liquid fuel costs are not fully captured under the current electricity tariff regime, forcing government to rely heavily on petroleum levies to support fuel procurement.

The Centre therefore called for urgent measures to address gas supply challenges, diversify Ghana’s energy mix, strengthen fuel procurement discipline, and reduce the sector’s growing exposure to debt and financial instability.