Guyana exports crude and imports much of the fuel it uses. Meanwhile, an overloaded grid still leaves households and businesses in the dark. Petroleum wealth gives us the means to address both problems.
By Dr. Karen Abrams, MBA AA
(Kaieteur News) – At the opening of the International Building Expo 2026, President Dr. Irfaan Ali said Guyana’s economy was on course to grow by more than 30 per cent this year. By the end of June, the Natural Resource Fund’s market value had reached US$4.294 billion. Then came a line that deserved the applause it received; “Our story is not an oil story.” He described a future of diversification, sustainability, and world-class healthcare, education and infrastructure. That ambition needs practical tests. Dependable, affordable electricity is one of them.
Director of STEM Guyana, Karen Abrams
In its recent Caribbean Economics Quarterly, the Inter-American Development Bank (IDB) reported that, although Guyana has been a net oil exporter since 2019, about 90 per cent of its energy is produced from imported oil. Guyana exports crude but does not refine it locally into the fuels used by vehicles, generators and much of the electricity system. We earn substantially more from petroleum exports than we spend on imported fuel, yet we remain exposed to international fuel prices.
The disruption of oil flows through the Strait of Hormuz shows why that exposure matters. A shock at a distant shipping route can raise prices across global fuel markets, even for buyers whose own supplies come from elsewhere. Guyana’s petroleum earnings give us financial capacity to respond, but a higher fuel bill can still affect electricity, transport and production costs.
That is a separate issue from the recent blackouts. According to Guyana Power and Light (GPL), it has enough generating capacity to meet current demand, but rapid growth in electricity use is straining transmission and distribution equipment. Feeders and other parts of the network can become overloaded, causing outages even when generating units are available. The company has also reported that peak demand reached 242.6 megawatts this year, up from 221 megawatts in 2025.
We should therefore resist the easy assumption that imported fuel is causing the lights to go out. Buying more fuel will not repair an overloaded feeder. Similarly, adding generating capacity will not guarantee reliable service if the network cannot deliver that electricity to customers. Generation, transmission and distribution must be planned and built together.
For families, these distinctions do not lessen the hardship. A blackout stops a water pump, turns off a fan on a punishingly hot night and can damage appliances. For a bakery, barber, welder or agro-processor, it can stop work altogether. Larger firms may spread the cost of generators, fuel and maintenance across thousands of sales. A small business must recover those costs from far fewer customers. Repeated outages can therefore make it harder for local enterprises to expand and compete.
This is where the oil money matters. Guyana has resources to invest in a dependable system. GPL says approximately US$800 million in grid investments are underway, including substations, transmission upgrades and new distribution infrastructure, with significant relief expected by mid-2027. The scale of that programme deserves recognition. It also warrants public benchmarks: which overloaded feeders will be strengthened first, when will each project enter service, and how will reductions in outage frequency and duration be measured?
The Gas-to-Energy project at Wales addresses another part of the challenge. It is intended to use offshore natural gas to produce up to 300 megawatts of electricity, with government projecting a substantial reduction in electricity costs. The offshore pipeline is complete, while the power plant and natural gas liquids facility have taken longer than originally promised. The public needs clear commissioning dates and regular reports on construction costs, power delivered and the eventual effect on tariffs. Crucially, the grid must be ready to receive and distribute the additional power.
The IDB also warns of Dutch disease; when oil-driven spending pushes up local costs faster than farms, factories and other businesses can increase their output. It notes, however, that real exchange-rate appreciation remained subdued through 2025 and that macroeconomic risks were largely contained. The lesson is to invest in productivity, skills, housing, food production and reliable electricity. It is no argument for holding down the wages of workers already facing higher living costs.
El Niño raises the stakes for farmers, who may need more irrigation and more electricity during prolonged dry conditions. Higher energy costs and unreliable supply can then feed into food prices. Energy, water and agriculture need to be considered in the same development plan.
Government has already cushioned households through fuel tax relief and electricity subsidies. Those measures help. But subsidies cannot strengthen a feeder or prevent a transformer from failing. Petroleum revenue offers an opportunity to do that work, and to measure whether the spending produces a service people can rely on.
A quarterly public energy dashboard would make the promise measurable. It should report available generation, peak demand and reserve capacity; outages and their causes; losses; grid upgrade milestones; Gas-to-Energy costs and commissioning; and the timetable for tariff reductions. It should also show how much of Guyana’s energy needs can realistically be met from domestic gas and renewables by 2030.
These are national development questions. Guyana’s story will be larger than oil when petroleum earnings help farms and small businesses compete, when households can count on the lights staying on, and when dependable power is an ordinary service rather than a promise tied to the next project.
Source: Kaieteur News
