Economist Professor Williams Peprah has urged the Ghanaian government to explore closer energy cooperation with Nigeria. This initiative aims to reduce Ghana's fuel import costs and protect consumers from rising petroleum prices. The call comes as petrol currently sells at GHS 14.5 per litre, and diesel approaches GHS 18.
Professor Peprah, speaking on Joy FM's Midday News on Tuesday, July 28, highlighted the impact of recent fuel price increases. He stated that Ghana should leverage regional partnerships to secure more affordable crude oil supplies. This approach would offer a more sustainable solution than relying solely on temporary interventions.
Global supply disruptions and extended shipping routes, driven by geopolitical tensions, have significantly increased the cost of transporting crude oil to Africa. These factors directly contribute to higher fuel prices in Ghana. Professor Peprah noted that a potential easing of conflicts, such as those involving Iran, could lead to a normalisation of prices.
He specifically mentioned that tankers avoiding the Strait of Hormuz are using the longer Red Sea route, impacting African supply chains. "This is the time for Ghana to now talk to our brother in Nigeria to see what support they can also give to us to reduce the cost," Professor Peprah suggested. He emphasised that a reduction of GHS 1 per litre would not have a major impact, stressing the need for a fundamental shift in supply strategy.
The economist also pointed to the high cost of crude oil transportation across Africa, a challenge acknowledged by Nigeria's Dangote refinery. This underscores the necessity for governments in the region to collaborate on addressing logistical hurdles. Professor Peprah believes that governments must unite to find ways to mitigate these costs effectively.
He further highlighted the potential role of the Tema Oil Refinery (TOR). Its return to active refining, supported by adequate investment and crude supply, could help lower the prices of petrol and diesel. "If that can happen, it may help reduce the price of petrol and diesel in Ghana," he added, suggesting a dual approach of regional sourcing and domestic refining.
This strategy aligns with broader efforts to stabilise Ghana's economy amidst global volatility. High fuel prices often lead to increased transportation costs, which can trigger inflationary pressures across various sectors. Securing cheaper crude from a regional partner like Nigeria could provide a significant buffer against international price fluctuations and strengthen Ghana's energy security.
The government's response to this proposal will be crucial for consumers and businesses alike. A successful negotiation with Nigeria could lead to more stable and affordable fuel prices, easing the burden on households and supporting economic growth. Decision-makers will need to assess the logistical and economic feasibility of such a partnership, considering long-term benefits for the nation.