GUYANA has proven itself to be a global leader in the future of oil and gas with growing geopolitical influence. But it is also important to note the impacts oil development could have on everyday life for Guyanese, at a time when households are struggling with high prices and global inflation.
Guyana’s oil production is set to lower household energy costs, reduce import dependence, and improve the country’s energy independence.
As Guyana continues to show robust growth in key areas, this bodes well for all sectors of the economy, not just the oil sector. For example, infrastructure investments and social advancements in Guyana are directly correlated with the rapid advancement of the oil and gas sector and offer a highly visible example of how oil revenues are being used to benefit Guyanese.

Oil and gas revenues fund almost 30 per cent of the 2023 budget, up from 27 per cent in 2022. The overall national budget is G$781.9 billion (US$3.75 billion) for fiscal year 2023, Guyana’s largest ever. Additionally, the oil and gas sector is estimated to have expanded by 124.8 per cent in 2022, with a total of 101.4 million barrels of oil produced. The better-than-expected performance of the sector allows for increased spending on infrastructure, electrification, gas-to-energy, hydropower, and solar energy projects that could help bring down costs for households. Importantly, the increase in spending is not a result of new debt or new taxes.

One key project that could play the biggest role in changing the lives of Guyanese people on a day-to-day level is the gas-to-energy (GTE) project for an integrated Natural Gas Liquids (NGL) Plant and a 300-megawatt (MW) combined-cycle gas turbine (CCGT) power plant at Wales, West Bank Demerara, Region Three. The government has said the gas project should start lowering household electricity costs by as much as half when it comes on line in 2024 or 2025.
At the contract signing last December, President Irfaan Ali said that the GTE project will unlock the country’s new energy mix, a significant step forward for a nation that has suffered from energy insecurity in the past.

Gas will provide a vital source of reliable and cleaner energy near-term and help renewables like hydropower and solar in the long-term. Rural households in Guyana will benefit from the development of infrastructure to expand access to electricity.
Guyana was once a country historically dependent on oil imports, not just for vehicle fuel, but for the Heavy Fuel Oil (HFO) that currently powers the electric grid. While HFO is not only an expensive and heavily polluting source of electricity, it is also tied to the global price of crude oil.

That has historically made fuel imports for electricity one of Guyana’s largest expenses and left the country’s power grid at the mercy of high global oil prices.
Guyana still suffers from some of the highest power prices in the region and the most unstable – but by diversifying Guyana’s energy mix and investing in GTE, this is soon to change that. Among experts, there is optimism that Guyana has turned the corner for its energy security by focusing on its domestic production, which allows the country to insulate and protect itself from market shock prices.

Now more than ever, it is critical Guyana cuts the cord and becomes self-sufficient, as last week OPEC+ announced it would make deep cuts to its output in July, likely pushing oil prices higher. This organisation pumps about 40 per cent of the world’s crude and cutting production directly impacts prices for consumers around the globe.
The NGL plant could also one day produce other key products beyond electricity, like butane and propane, which would help create a cheaper domestic supply for major household supplies like cooking gases. It will also form the hub of what could one day be a major industrial zone for production of local products like fertilisers using gas as a feedstock.
The major expansion of new port and road infrastructure funded by oil revenues could also help gradually bring down consumer prices for many goods, as it becomes easier and cheaper to import goods from overseas and Brazil.

Guyana is working to move away from import-dependency by investing in its own infrastructure. This approach will help reduce prices for Guyanese and is only possible because of the oil revenues flowing into the economy. The future is looking bright for Guyana as it demonstrates to the rest of its region what self-sufficient energy independence and a sustainable future can look like.