THE GAS-TO-POWER LOOP: WHY GHANA PAYS TWICE FOR THE SAME MOLECULE

Every time a Ghanaian household switches on a light bulb, pays an electricity bill, or complains about power instability, a much deeper financial crisis unfolds behind the scenes. 

What appears to be a simple issue of electricity supply is, in reality, a complex chain of debt, subsidies, and institutional inefficiencies quietly draining Ghana’s energy sector. Even more concerning is that ordinary citizens may unknowingly be paying for the same energy twice - first through monthly electricity bills and again through the gradual depletion of future petroleum wealth meant to secure the country’s long-term development. 

Analysis of Ghana's energy supply chain reveals deep structural challenges within the gas to power sector growing debt between Ghana National Gas Limited Company (GNGLC) and Ghana National Petroleum Corporation (GNPC) reflects a deeper structural weakness within the country’s energy financing system rather than a temporary financial setback. As of December 2025, GNGLC owed GNPC more than US$620 million, revealing how inefficiencies across the electricity supply chain continue to accumulate into a national economic burden. 

A closer evaluation of Ghana’s gas-to-power chain shows that operational inefficiencies are forcing critical institutions to absorb unsustainable financial losses. A closer evaluation of Ghana’s gas to power chain shows that operational inefficiencies are forcing critical institutions to absorb unsustainable financial losses and that problem begins with weak revenue collection at the consumer level. Ideally, electricity payments made by households to the Electricity Company of Ghana (ECG) should move smoothly through the system:

ECG pays the Volta River Authority (VRA), VRA settles obligations to GNGLC for gas supply, and GNGLC finally compensates GNPC for upstream natural gas production.

However, inconsistent revenue recovery by ECG disrupts the entire cycle. Once ECG struggles financially, VRA becomes cautious with payments, GNGLC experiences liquidity constraints, and GNPC ultimately absorbs the pressure. Despite delayed payments, GNPC cannot suspend gas supply because Ghana’s thermal plants depend heavily on natural gas for approximately 40–50% of national electricity generation.

Any interruption would immediately affect hospitals, industries, water systems, and domestic consumers. Consequently, GNPC continues supplying gas on credit, leading to the persistent expansion of unpaid obligations. The 2025 financial data further demonstrates the severity of the issue. GNPC supplied approximately 44.96 billion cubic feet of gas to GNGLC within the year, creating new liabilities worth over US$918 million. Although nearly US$298 million was written off through credit notes, the outstanding debt reduced by only 1.7%. From my assessment, this indicates that the sector is not genuinely recovering; rather, it is surviving through debt restructuring and financial concessions while the underlying imbalance remains unresolved.

Another critical observation is the long-term impact on Ghana’s national petroleum wealth. GNPC was originally intended not only to manage petroleum resources but also to contribute significantly to the Petroleum Holding Fund (PHF), which supports government expenditure, infrastructure development, and future national savings. However, because GNGLC cannot fully meet its obligations, GNPC’s capacity to contribute meaningfully to the PHF continues to decline.

The situation worsened after the 2025 amendment that reduced GNPC’s share of petroleum revenue from 30% to 15%. This sharply weakened GNPC’s financial position. Payments received from GNGLC reportedly dropped from US$280.59 million in 2024 to US$107.89 million in 2025, representing a decline of more than 61%. This reduction limits GNPC’s ability to sustain upstream operations while simultaneously absorbing downstream losses.

From my perspective, the most concerning aspect of this crisis is that Ghanaian citizens effectively finance the same electricity twice. First, consumers pay directly through electricity tariffs. Secondly, future petroleum wealth that should support national development is redirected to offset inefficiencies within the energy sector. In effect, resources intended for future generations are being consumed to stabilize present operational failures.

Although official reports describe the sector as operating under a “quasi-steady-state equilibrium,” the available financial figures suggest otherwise. GNGLC continues operating under structural deficits, while GNPC provides subsidized support that may not remain sustainable over time. The system therefore appears less like a stable equilibrium and more like a controlled financial deterioration designed to prevent immediate collapse.

The report concludes that Ghana's gas to power sector requires more than temporary financial interventions. Without major reforms in revenue collection, pricing structures, operational efficiency, and debt management, the burden will continue shifting onto future generations. The longer these structural weaknesses persist, the greater the risk that Ghana’s future petroleum wealth will be depleted not for development, but for sustaining an increasingly fragile energy system.

William Takpah. Researcher, Black Gold Bulletin

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