Ghana must immediately enforce its domestic market obligation framework to ensure predictable crude supply for local refineries. This is particularly critical for the Tema Oil Refinery (TOR), according to a new policy paper by the Institute for Energy Security (IES). Relying on discretionary allocations risks wasting TOR's recent operational turnaround.
The IES highlights that Ghana possesses the legal framework to compel petroleum contractors to supply a portion of their crude entitlement to the domestic market. However, this framework has seen limited practical enforcement. TOR's recent rehabilitation and resumption of operations remove a key objection to enforcement, as the refinery can now absorb crude at a meaningful scale.
This situation fits into Ghana's broader economic strategy to reduce reliance on imported refined petroleum products. Ensuring a stable domestic crude supply for TOR can lessen foreign exchange demand and improve energy security. The Petroleum (Exploration and Production) Act, 2016, Act 919, and its regulations provide the legal basis for this obligation.
The IES paper states, "A restored refinery does not by itself guarantee restored refining output." It emphasizes that predictable supply is now the main constraint for TOR's sustained operation. This underscores the need for formal, rather than ad hoc, supply arrangements.
The implications are significant for Ghana's energy sector and overall economy. Formalizing domestic crude supply will provide TOR with the certainty needed for planning, financing, and sustained throughput. Decision-makers must act to prevent TOR from facing the same operational uncertainties that led to years of underperformance.
Ghana already has the legal tools to mandate domestic crude supply, specifically Section 71 of the Petroleum (Exploration and Production) Act, 2016, Act 919. This Act permits the Minister responsible for the sector to require contractors to sell a determined share of their petroleum entitlement. Regulation 32 of L.I. 2359, as amended by L.I. 2390, further details the operational framework.
This framework covers calculating required volumes, delivery arrangements, market-based pricing, and dispute resolution. The IES argues the problem is not a lack of legislation but a gap between law and implementation. Public evidence of 90-day notices or annual domestic supply calculations remains limited.
TOR underwent a turnaround maintenance programme between August and October 2025, with refining operations resuming in December. The refinery currently operates at about 28,000 barrels per stream day. Its nameplate capacity is 45,000 barrels, with plans to expand towards 100,000 barrels per day.
The IES points to Ghana's reported one-million-barrel Jubilee crude allocations to TOR as evidence of existing domestic supply efforts. However, it argues these arrangements should be formalized under Regulation 32. Occasional allocations do not provide the certainty required for refinery planning and crude scheduling.
The paper draws lessons from Nigeria and Indonesia. Nigeria's Domestic Crude Oil Supply Obligation offers a cautionary tale of a legally sound framework failing to deliver predictable volumes. The Dangote Refinery, for example, has faced periods where domestic allocations fell short, forcing dollar-denominated international crude purchases.
This exposure to dollar purchases and local-currency refined product sales recreates foreign-exchange risks. Indonesia provides a contrasting example, where domestic market obligations are embedded directly into production-sharing contracts. This provides refiners and government greater certainty over future feedstock access.
For Ghana, the importance extends beyond keeping TOR operational. Greater domestic refining capacity can reduce the economy's vulnerability to imported petroleum products. It also mitigates risks from international freight disruptions and reduces foreign-exchange demand associated with financing refined-product imports. This strategic move is vital for Ghana's economic stability and energy independence.