$18B approved in budget for 2.4M barrels of fuel for GPL

Some $18 billion has been approved by the National Assembly for the procurement of 2.4 million barrels of fuel for the Guyana Power and Light (GPL) company in 2025.

According to Prime Minister Brigadier (Ret’d) Mark Phillips, the approval comes in light of growing energy demands and a global surge in fuel prices, which have placed additional pressure on the utility provider.
“At the current fuel price of approximately US$104 a barrel, GPL can procure 1,657,371 barrels of the fuel at the current customer tariff without any increase in customer rates. However, GPL needs 2,462,380 barrels of fuel to meet its generation requirements. GPL needs funding to procure, therefore, an additional 805,009 barrels of fuel at approximately US$104 per barrel. This equates to $18 billion. With the exchange rate being $215,” PM revealed.
The Prime Minister disaggregated the sum during the consideration of the budget estimates on Monday.
This allocation, while necessary for the operation of GPL, raises the question of how sustainable these costs are in the long run, especially considering that the break-even cost for GPL is $70 per barrel, with the current tariff structure falling short by US$34 per barrel.
Nevertheless, PM Phillips emphasised that, despite these financial challenges, it has not increased the electricity rates for households or businesses since assuming office in August 2020.
“We have not increased the rate of electricity for the household and for any of the consumers from the time we have taken office. Notwithstanding the shocks that would have seen fuel prices going through the roof on many occasions and other issues suffered by GPL, our people today, January 2025, is paying the same rate that they were paying for electricity pre-COVID in Guyana. The point is, you have a Government that did not increase the electricity rate in five years,” he added.
Back in December 2024, GPL through funding from Government brought on stream a second power ship to supply the national grid, servicing some 230,000 customers.
The arrival of this ship comes after a contract signing in November between GPL and the Joint Venture of Turkish-based Karpowership Global DMCC and Qatar-based UCC Energy International LLC JV, to charter a second power ship with a total installed capacity of 75 megawatts (MW) for two years.
In the first phase, the power ship will dispatch 60 MW to the grid in approximately six weeks followed by an additional 15 MW, once works are completed on an additional transmission line. The contract requires GPL to pay the Joint Venture 8.52 US cents per Kilowatt-hour (kWh) as a monthly charter fee for the new power ship.
It also requires a monthly operation and maintenance fee of 0.98 US cents per kWh, based on electricity generated. Under the contract, GPL is also responsible for providing Heavy Fuel Oil (HFO) for the operation of the ship’s generators. (G1)