Ghana’s expanding refinery capacity will improve energy security but is not yet sufficient to eliminate the country’s dependence on imported petroleum products or protect it from global fuel market shocks, Mr Benjamin Nsiah, Executive Director of the Centre for Environmental Management and Sustainable Energy (CEMSE), has said.
In an interview, Mr Nsiah said existing refineries, even when operating at full capacity, could meet only about 60 per cent of Ghana’s daily petroleum demand.
He explained that Ghana consumed between 120,000 and 140,000 barrels of petroleum products each day, making current domestic refining capacity inadequate to satisfy national demand.
“At full capacity, looking at our current consumption of about 120,000 barrels a day to 140,000 barrels a day, they are likely going to do about 60 per cent of our daily demand,” he said.
Mr Nsiah said while expanding local refining capacity was essential to strengthening the country’s energy security, it would not, on its own, insulate Ghana from fluctuations in international fuel prices.
He noted that under Ghana’s deregulated petroleum pricing regime, domestic pump prices continued to be influenced by international refined petroleum product prices, exchange rate movements between the Ghana cedi and the United States dollar, freight and insurance costs, as well as statutory taxes and levies.
According to him, Ghana would remain exposed to developments in the global petroleum market as long as imported refined products continued to account for a significant share of domestic fuel supply.
Mr Nsiah, however, expressed optimism that planned expansion projects by the Tema Oil Refinery (TOR) and the Sentuo Oil Refinery would significantly increase domestic refining capacity.
He said if TOR successfully implemented its proposed expansion of an additional 100,000 barrels per day, alongside Sentuo’s planned capacity increase, the two refineries could meet Ghana’s daily petroleum demand and create opportunities for exports.
“If they are able to do, as TOR has proposed, about an additional 100,000 barrels, and Sentuo is also adding, then these two companies will likely be able to exhaust our daily demand and even export,” he said.
Mr Nsiah said increased refining capacity would strengthen Ghana’s energy security, improve prospects for petroleum self-sufficiency and position the country as a supplier of refined petroleum products within the West African sub-region.
He noted that the Tema Oil Refinery had recently announced a profit after tax of GH¢1.24 billion following operational reforms aimed at enhancing its contribution to national energy security.
Mr Nsiah said as domestic refining capacity expanded, Ghana should gradually review its petroleum pricing framework to reflect local refinery costs and operational realities.
He said a stronger local refining industry would provide an opportunity to reduce the country’s reliance on international pricing benchmarks, which continued to influence domestic fuel prices.
Mr Nsiah said the long-term objective should be to build a resilient petroleum sector capable of ensuring reliable fuel supply while minimising the impact of external market disruptions on consumers and businesses.
