Ghana's National Petroleum Authority (NPA) CEO, Godwin Edudzi Tamakloe, has declared that the fuel queues of 2014 and 2015 were not caused by a genuine shortage of petroleum products. He described these past shortages as 'artificial', a key lesson now guiding government policy in the downstream petroleum sector.
Mr. Tamakloe explained that the queues at filling stations during that period were 'internally generated'. This means they were not due to a lack of available products. This experience highlighted the critical importance of petroleum products for Ghana's economy and national security.
This revelation provides crucial context for Ghana's current fuel management strategy. The country is presently grappling with increased pressure on its fuel market. This pressure stems from rising international crude oil prices and the cost of refined petroleum products. The cedi's performance against major currencies also significantly impacts domestic fuel costs.
Speaking on Joy News’ PM Express Business Edition, Mr. Tamakloe recalled discussions with former President John Mahama about the 2014-2015 fuel crisis. He emphasized that the strategic management of the downstream sector is now viewed through the lens of national security. This perspective underscores the government's commitment to preventing similar 'artificial' shortages.
The NPA CEO stressed the petroleum sector's vital role in the broader economy. He noted that consumers have very few alternatives when fuel becomes unavailable. He contrasted this with electricity outages, where people can adjust for some hours. However, a lack of fuel brings economic activity to a standstill, affecting transportation, businesses, and daily life.
Mr. Tamakloe outlined the government's dual approach to managing the sector. This involves effectively managing internal risks while also preparing for external shocks. He likened the petroleum sector to the 'nervous system' of the entire economy. This analogy highlights its interconnectedness and sensitivity to various factors.
He identified three primary factors influencing fuel availability and pricing in Ghana. These are the Free On Board (FOB) price, the tax component, and crucially, the exchange rate. Since Ghana imports most of its petroleum products, the exchange rate directly affects the cost of these imports in local currency.
The NPA recently increased the price floor for petrol to GHS 16 per litre. Diesel also saw an increase to GHS 16.77 per litre, effective from September 16. These adjustments reflect the higher international costs and the impact of the exchange rate. Some Oil Marketing Companies have already adjusted their pump prices accordingly.
The government's strategy aims to build resilience against market volatility. By understanding the root causes of past disruptions, authorities can implement more robust measures. This includes ensuring consistent product availability and stabilizing prices for consumers. The focus remains on safeguarding national security through energy security.
The lessons from 2014-15 are therefore central to current policy decisions. The NPA's proactive stance seeks to prevent any recurrence of 'artificial' shortages. This commitment is vital for maintaining economic stability and public confidence in Ghana's energy sector.