Ghana’s growing refining capacity currently meets only 60 percent of the nation’s daily petroleum demand. This leaves the country significantly exposed to global petroleum market shocks, according to energy expert Benjamin Nsiah.
Local refineries operating at full capacity can supply approximately 60 percent of the 120,000 to 140,000 barrels of petroleum products Ghana consumes daily. The remaining 40 percent must be imported, directly linking domestic fuel prices to international market developments. This ongoing reliance on imports means that global oil price fluctuations and the Ghana cedi’s exchange rate against the US dollar continue to heavily influence pump prices.
This situation highlights a critical challenge for Ghana’s energy security and economic stability. The country’s deregulated pricing system means that international refined petroleum product prices, freight costs, insurance, and statutory taxes all contribute to the final price consumers pay. Despite efforts to boost local production, the significant import component ensures that global events, such as geopolitical tensions or supply chain disruptions, directly impact Ghanaian businesses and households.
Benjamin Nsiah, Executive Director of the Centre for Environmental Management and Sustainable Energy (CEMSE), emphasized this point in a recent interview. He stated that while investments in local refining infrastructure are crucial for strengthening energy security, they do not yet provide complete insulation. Mr. Nsiah’s observations underscore the need for a more robust domestic refining industry to mitigate external vulnerabilities.
Looking ahead, planned expansion projects by local refining companies offer a path towards greater self-sufficiency. The Tema Oil Refinery (TOR) recently reported a profit after tax of GHS 1.24 billion, indicating progress in its operational reforms. TOR’s proposed expansion of an additional 100,000 barrels per day, combined with contributions from Sentuo, could enable Ghana to meet its entire fuel requirement. Achieving this capacity would position Ghana for petroleum self-sufficiency and potentially allow for exports within the West African sub-region. This would also create an opportunity to recalibrate the petroleum pricing framework, moving away from international benchmarks towards local refinery costs and operational realities.