A potential Strait of Hormuz disruption could trigger swift increases in fuel prices in Ghana, an energy law expert has warned, as global markets react to escalating tensions in the Middle East.
While authorities insist that domestic fuel stocks remain adequate, analysts say the real risk lies in rising international crude and refined product prices.
Energy law specialist Lom Nuku Ahlijah, speaking in an interview with Vaultz News, cautioned that any effective halt in tanker traffic through the Strait of Hormuz would immediately reverberate across global oil markets.
“Ghana should expect fast upward pressure on pump prices,” he stated. He explained that Hormuz functions as a critical global chokepoint, and when the route appears unsafe or inaccessible, “the market reprices all seaborne crude and refined products.”
Direct Impact on Ghana’s Pricing Formula
For Ghana, the consequences of a Strait of Hormuz disruption would not necessarily stem from physical shortages but from price transmission mechanisms embedded in the country’s fuel pricing framework.
Mr. Ahlijah explained that Ghana’s pump prices are determined by guidelines set by the National Petroleum Authority (NPA).
The formula begins with the international Free on Board (FOB) price of refined petroleum products, adds supplier premiums, and then incorporates domestic taxes, levies and regulated margins to determine the final ex-pump price.
“Which means any impact on the international product prices affects the formula directly.”
Energy law specialist Lom Nuku Ahlijah
In essence, even if Ghana has sufficient fuel in storage, a spike in global prices will automatically feed into the pricing window once the NPA reviews and adjusts rates. This could translate into higher transport fares and increased cost of goods, with broader implications for inflation.
NPA Moves to Calm Public Fears
Amid growing anxiety, the NPA has sought to reassure the public that Ghana’s immediate supply situation remains stable. The Authority recently confirmed that the country holds enough petroleum products to last several weeks, despite the escalating Middle East crisis.
Director of Economic Regulation and Planning at the NPA, Mr. Tasunti, revealed that multiple vessels are currently waiting to discharge at the Tema anchorage. These include two cargoes of diesel and two cargoes of petrol, with additional imports already scheduled.
The regulator emphasized that these stock levels, combined with ongoing imports and local production, are sufficient to keep the domestic market supplied in the short term.
However, while the NPA can manage supply logistics, it has limited control over international price movements.
Why the Strait Matters to Ghana
The Strait of Hormuz is one of the world’s most strategic maritime passages, with more than 20 percent of global oil supply moving through the narrow waterway.
Following recent hostilities involving Iran and Western allies, most tanker owners, oil majors and trading houses have reportedly suspended shipments of crude oil, fuel and liquefied natural gas through the corridor.
The move has rattled markets, with traders bracing for potential supply constraints. According to Ajay Parmar, director of energy and refining at ICIS, “While the military attacks are themselves supportive for oil prices, the key factor here is the closing of the Strait of Hormuz.”
He projected that oil prices could surge sharply once markets reopen. “We expect prices to open much closer to $100 a barrel and perhaps exceed that level if we see a prolonged outage of the Strait,” Parmar added.
Oil Market Forecasts Turn Bullish
Global financial institutions and commodity analysts are closely watching developments. Middle East leaders have reportedly warned Washington that a wider war involving Iran could push oil prices above $100 per barrel.
RBC analyst Helima Croft indicated that such a scenario remains plausible if the crisis deepens. Meanwhile, analysts at Rabobank are slightly less aggressive in their outlook but still expect prices to remain elevated, projecting that crude could hold above $90 per barrel in the near term.
These projections underscore the vulnerability of oil-importing nations like Ghana to geopolitical shocks far beyond their borders.
A sustained rise in oil prices would not only affect motorists but could also strain Ghana’s fiscal position. Higher import costs increase foreign exchange demand, potentially adding pressure on the cedi. Transport, manufacturing and agriculture sectors would likely experience cost escalations, which could cascade through the economy.
Mr. Ahlijah’s warning highlights the interconnectedness of global energy markets. Even without a direct physical disruption to Ghana’s fuel supply chain, international price adjustments triggered by a Strait of Hormuz disruption could quickly filter into domestic pricing structures.
For now, the NPA’s assurance of adequate stock provides some comfort. Yet the ultimate trajectory of pump prices will depend largely on how long tensions persist and whether tanker traffic through the vital waterway resumes normally.
As markets prepare for possible volatility, Ghanaian consumers and businesses alike will be watching global oil benchmarks closely in the days ahead.
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