Reduce gas prices to aid industrialisation - Energy Economist

Government has been urged to take a critical look at the gas sector and review prices.

“If we want to be competitive, if we want to support industrial growth, then ultimately it means that the price of power that people pay has to come down. The pricing of gas, which is the fixed stock for power generation, is important.

“Ultimately, we know that if the price for gas is low, electricity tariffs will be low. Then you create jobs, then you have more revenues coming to government. This would boost industrialisation, create more jobs and wealth for the people,” Dr Theophilus Acheampong, an Energy Economist, said on Monday.

Dr Acheampong, who doubles as senior fellow at IMANI, made the call at a workshop on gas utilisation, gas pricing and inclusive development organised by IMANI Centre for Policy and Education and the Fondazione Eni Enrico Mattei (FEEM), a research institution in Accra.

At the workshop, research and analysis on the Gas Price Formation in the country was discussed and the need for the gas prices to be reviewed was also highlighted.

Ghana has made significant savings and met environmental benchmark due to the gas sector.

However, it’s faced with structural non-payment issues due to the inability to pay for gas supplied by exploration and production companies to the Ghana National Petroleum Company through the Ghana National Gas Company for use by the Volta River Authority and other Independent Power Producers.

Dr Acheampong said in Ghana about 60 per cent of power comes from thermal sources.

“This is being generated at 13 to 14 cent per kilowatt per hour while that of neighbouring Cote d’Ivoire is generated at 10 cent power kilowatt per hour.

He said the gas price in Ghana is still relatively high because there is a lot of rent (extra monies) that go to government.

Professor Manfred Hafner, a Senior Fellow with FEEM, reiterated the need for government to reduce its overall rent on the processing of gas.

Kofi Bentil, the Vice President of IMANI Ghana, said the country needs to have better clarity on its National Gas Strategy, especially regulation and pricing issues, adding that “we still don’t have a good enough strategy on our gas sector.”

He suggested that the country should rather export almost all of its oil and use gas produced locally.