Due to high import costs and a deregulated downstream industry, Ghana is currently dealing with the difficulty of a constant increase in the price of petroleum products.
The country in West Africa, which has been a net exporter of crude oil since 2010, is extremely vulnerable to fluctuations in the price of oil since it imports a sizable portion of the petroleum products it uses, primarily from Europe (Rotterdam). As a result, its economy is vulnerable to fluctuations in the global markets for crude and petroleum products, as was recently seen with the conflict between Russia and Ukraine.
However, things are anticipated to change as the Dangote Petroleum Refinery is predicted to alter the Ghanaian downstream industry, according to Mustapha Abdul-Hamid, Chief Executive Officer of the National Petroleum Authority (NPA) of Ghana.
He claims that the introduction of the 650,000 barrels per day (bpd) refinery will change Ghana’s downstream industry by lowering the cost of importing petroleum products there.
Abdul-Hamid stated that the completion of the Dangote Petroleum Refinery project will be a breakthrough for the West African area, which has long been dependent on the importation of petroleum products, in a speech at the 16th Oil Trading and Logistics Expo in Lagos.
“At the moment, there are no gasoline subsidies in Ghana, and the downstream industry there is entirely unregulated. “Importing from Nigeria will unquestionably be more cost-effective and less expensive than importing from Rotterdam in the Netherlands, where we receive the majority of our fuel in Ghana, in a deregulated market where importers recover all of their costs,” he said.
As we all know, the price builds up for a litre of fuel will include the cost of shipment, transportation, insurance, and others, but if we are importing from Nigeria into Ghana, this will bring down the cost of fuel in our country,” he added.
Abdul-Hamid also praised the Ghanaian government’s choice to invest $60 billion in the construction of a $60 billion petroleum hub for storage and marine facilities on 20,000 acres of land in the western part of the nation.
He claims that by linking the upstream and downstream, the project will hasten the development of the continent’s oil and gas resources, which include refineries and petrochemical facilities.
It will advocate for biofuels and cleaner fossil fuels as a means of achieving a just energy transition. Gas is the least carbon-emitting fossil fuel, hence it has been accepted as the transition fuel, he continued.