Mass fuel storage in times of low prices and crude oil refinery have been identified as the best bet to shield Ghana’s economy from the vagaries of geopolitical tensions.
This proposal comes in the face of mounting geopolitical uncertainty, particularly the escalating tensions between Israel and Iran, which have put Ghana’s economic stability under threat.
Many industry analysts have predicted with certainty that the ongoing Israel-Iran tension will definitely impact Ghana’s fuel prices at the pump, threatening the gains made so far. This is because Iran, a leading producer of crude oil in the world, may not be able to supply enough to the world market, which can lead to shortages that can drive prices up.
Amidst this threat, the Executive Secretary of the Chamber of Petroleum Consumers (COPEC), Duncan Amoah, believes the country’s vulnerability to international fuel price shocks can only be tamed through strategic fuel storage and a robust domestic refining capacity.
Duncan Amoah, who was speaking on the implications of global crises on Ghana’s energy market, observed that Ghana’s continued position as a “price taker” in the global oil market makes its economy dangerously exposed to external shocks unless urgent action is taken to enhance fuel storage infrastructure and revive local refineries.
The Need for Strategic Reserves
Ghana currently lacks a national buffer of petroleum products that can cushion it during global supply disruptions or price spikes.
COPEC believes that empowering the Bulk Oil Storage and Transportation Company (BOST) to play a more active role in securing and storing fuel products is no longer optional but an economic imperative, considering the prevalence of geopolitical tensions.
“Ghana has not much say in what happens or prevails internationally, and so if you have a situation where things just happen very fast and it would affect prices, and it would affect your pump prices locally, and it would affect your economy,” Duncan Amoah noted.
He added that, “Your only safeguard measure or mitigating measure is to ensure that you have enough refining capacity. You are probably storing or buying crude for the refineries.”
With global conflicts like the Israel-Iran standoff sending ripples through the oil market, Amoah argues that Ghana must insulate its economy by ensuring that it can draw on domestic reserves when global supplies falter or prices surge.
Reviving Local Refineries for Long-Term Stability
Beyond storage, the COPEC boss also pointed to Ghana’s underutilized refining capacity as a missed opportunity to gain greater control over fuel pricing and reduce dependency on expensive imports.
Ghana’s national refinery, Tema Oil Refinery (TOR), has remained largely dormant for years, plagued by operational and financial constraints. COPEC is now calling on the government to inject the needed capital to restore full operations and enhance national fuel security.
Fuel Prices and the Ripple Effect on Inflation
Duncan Amoah’s warning comes against the backdrop of rising global oil prices, an outcome of intensifying geopolitical conflict. According to him, any further hike in fuel prices would ripple through the Ghanaian economy, affecting transport fares, food prices, and the general cost of living.
“Once fuel begins to go up, transport fares will most likely go up. That means increased costs in goods and services,” he noted.
He further expressed his fears that without a buffer system, Ghana risks eroding recent economic gains made under the current administration.
“I don’t think we should wait any longer. A government that has done so well at this point should not allow these shocks to wipe out the gains chalked over the past six months,” he stressed.
Duncan Amoah is convinced that the shield Ghana’s economy and citizens from the negative impact of the geopolitical tensions which the country has no control over, fuel storage and refining are Ghana’s most reliable insurance.
He calls for strategic investments in these areas since it will not only stabilize the domestic fuel market but also protect the broader economy from the volatility of international events.
