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Ken Ofori-Atta has announced at least 15 new measures to address the challenges of the energy sector, including the increase in the Energy Sector Levy (ESLA) from 17% to 21%.
The finance minister has declared "state of emergency" in the energy sector, which he says faces serious challenges.
Ken Ofori-Atta said the challenges could pose serious financial risks to the entire economy.
"At the heart of these challenges are the odious buy-and-deliver contracts signed by the NDC, which force us to pay for a capacity we do not need," Ofori said. Atta Monday during the presentation to Parliament of the mid-year budget review.
The country, he said, is currently paying more than $ 2.5 billion a year for some 2,300 MW of installed capacity not consumed by the country.
"Currently, according to the Energy Commission, our installed capacity of 5,083 MW is almost double our peak demand of approximately 2,700 MW. In particular, 2,300 MW of installed capacity were subscribed to the card. This means that we are contractually obliged to throw money for this excess capacity that we do not consume …
Similarly, with respect to gas, Ghana has signed contracts for around 750 million cubic feet per day by 2023. This is happening even after the government terminated two more LNG contracts in 2017, "he explained. Current demand is about 250 mmscf per day and is expected to increase between 450 and 550 mmscf per day by 2023.
"About 640 million cubic feet of contract gas supply is for consumption, which means we have to pay whether we use it or not. Starting in 2020, if nothing has been done, we will face annual excess charges related to gas production capacity ranging from $ 550 million to $ 850 million.
"Mr President, we can not allow this situation to continue, there is no doubt that the energy situation is shocking the economy." We are in a state of emergency and must therefore react with urgency and audacity.
"We will, from 1 August 2019, with the support of Parliament, make underwriting contracts" a beast of the past, "he lamented.
Fortunately, we have a plan to solve this problem, he said. He announced at least 15 new measures to address the challenges of the energy sector, including the increase from 17% to 21% of the Energy Sector Tax (HIT).
The NPP, in its opposition, described the tax introduced in 2015 as a "nuisance tax".
This tax was introduced to pay off huge debts in the energy sector, known as legacy debts, as they go back 20 years. The minister revealed that nearly 6 billion cedis had been collected to repay about 60% of the debts inherited from the energy sector.
The increase in the tax is expected to result in an increase of 90 pence per gallon of gasoline and diesel, revealed the mid-year budget.
"The government proposes to raise taxes on the energy sector by $ 0.02 per liter for gasoline and diesel and $ 0.08 per kilogram for LPG," he said. said Ken Ofori-Atta.
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