The age-old campaign for Ghana to refine its own crude oil is once again gaining momentum following the rising global tensions and volatile fuel prices.
There has been a rise in the campaign for a local refinery after geopolitical tension, emanating from the Israeli-Iran conflict, caused international crude prices to rise after a long period of stability.
The Chamber of Petroleum Consumers (COPEC) has been championing this call for years and has reignited the calls following the latest development.
The latest to join the campaign is an economist at Pentecost University, Dr. Paul Appiah Konadu. The economist believes that the time for pragmatic action is now.
In his view, it is untoward for a country that produces crude oil in commercial quantities to be exposed to the vagaries of continuous importation of fuel and it accompanied shocks to the economy.
Ghana’s Oil Paradox
Despite being an oil-producing nation for over a decade, Ghana still imports nearly all of its refined petroleum products.
Reports indicate that the country’s daily consumption stands around 70,000–90,000 barrels per day, well below the 160,000 barrels currently produced. This means Ghana has more than enough crude to meet its domestic fuel needs. Yet, without functioning local refineries, the crude is exported, often unrefined, only to be repurchased as diesel, petrol, or LPG at a premium.
“We are lifting about 160,000 barrels per day. That is enough to meet our consumption. But we ship everything to the U.S. and the Netherlands, only to buy back refined petroleum products at much higher prices. It doesn’t make economic sense,” the economist told The High Street Journal.
Over the years, Ghana’s fuel prices at the pumps have been highly vulnerable to global supply shocks. Geopolitical disruptions, ranging from tensions in the Middle East to OPEC+ production cuts and shipping crises in the Red Sea, have caused erratic price swings on the international market. Each shock ripples through Ghana’s economy in the form of higher transport costs, inflation spikes, and pressure on the cedi.
“If we can refine our oil here, we can develop the shock absorbers to insulate ourselves,” Dr. Konadu emphasized. “We’re too exposed.”
The Case for Local Refining Gains Urgency
The geopolitical environment has shifted dramatically in recent months. The Russia-Ukraine war, escalating Israel-Iran hostilities, and Houthi attacks on Red Sea trade routes have all contributed to tighter oil supply, rerouted tankers, and higher shipping insurance costs.
Successive governments have floated refinery revitalization plans with limited follow-through.
The Tema Oil Refinery (TOR), once a strategic national asset, now operates below capacity and often sits idle due to debts, outdated infrastructure, and management bottlenecks.
Private refiners like Sentuo Oil Refinery have emerged as promising players, but a coordinated national refining strategy combining public support, private capital, and regulatory clarity is still inadequate.
The proponents of this renewed campaign believe that if Ghana continues on its current path, it will remain at the mercy of global oil price swings. However, if it takes bold steps to refine locally, the country could reposition itself as a net exporter of refined products, much like Côte d’Ivoire and Senegal are attempting to do.
