Duncan Amoah, the Executive Secretary of the Chamber of Petroleum Consumers (COPEC), has intensified calls for the government to prioritize technical and strategic investments in the Tema Oil Refinery (TOR) to prevent the nation’s energy security from being compromised by “inefficient, old, and obsolete” infrastructure.
He asserts that the current state of the refinery significantly hinders its processing capacity, leading to substantial volume losses during production that directly impact the price of fuel at the pumps.
By transitioning to a “more modern refinery concept,” the government can ensure that crude oil inputs yield their maximum refined output, thereby stabilizing supply and protecting the Ghanaian consumer from unnecessary costs associated with plant obsolescence.
“Whatever necessary investments we need to put in the refinery, put it there. Also, bring the post infrastructure to some very, very good use at this point, where government would now begin to look at strategic reserve margins. We need to be able to store strategic fuel to be able to push in all of us in such difficult times as we find currently on our hands.”
Duncan Amoah, the Executive Secretary of the Chamber of Petroleum Consumers (COPEC)
Dwelling on this urgent need for modernization, Mr. Amoah highlighted that the heavy lifting required to avert further economic strain involves not just retooling the refinery, but also optimizing port infrastructure for strategic purposes.
He argued that the current inefficiency where 1 million barrels of crude might only yield 800,000 to 900,000 barrels of refined product is a drain on national resources that can no longer be ignored.
This technical deficit is compounded by the lack of robust “strategic reserve margins,” a safety net that could be funded by the very levies Ghanaians pay when buying fuel.
Without a modern facility and a dedicated storage strategy, the country remains highly vulnerable to international market shocks and the marginal depreciation of the Cedi, which continues to threaten price stability despite occasional market declines.
Economic Resilience Through Domestic Refining
A comprehensive upgrade of the nation’s refining capacity offers a multifaceted shield for the Ghanaian economy, primarily by reducing the “toxic link” between global geopolitical volatility and local purchasing power.
Currently, the country spends approximately $3 billion annually importing refined petroleum products, a massive drain on foreign exchange reserves that frequently triggers Cedi depreciation.
By investing in modern technology such as the proposed integration of the F-61 processing unit to raise capacity from 28,000 to 45,000 barrels per day Ghana could meet a significantly higher percentage of its domestic demand locally.
This shift would allow the banking sector to keep critical foreign exchange within the domestic system, effectively “flipping the script” so that global oil price hikes become a manageable variable rather than a national crisis.
Strategic Reserves as a Macroeconomic Buffer
The establishment of a robust strategic reserve margin is the second pillar of this proposed energy transition. Currently, the nation’s fuel reserves are often described as “abysmal,” frequently hovering around a five-week supply, which leaves the economy exposed to supply chain disruptions in the Middle East.
Utilizing the existing infrastructure of the Tema Oil Refinery and the Bulk Oil Storage and Transportation (BOST) company which together have the potential to hold nearly one millionmetric tonnes could extend the national buffer to four or six months.
This “national emergency battery” would act as a price stabilizer, allowing the government to release stock during periods of extreme international volatility, thus preventing the “panic buying” and rapid inflation that typically follow global supply shocks.
Navigating the Green Transition and Fiscal Stability
As Ghana navigates the broader energy and green transition, the modernization of its refinery is not merely an industrial necessity but a fiscal imperative.
Efficient local refining ensures that value addition occurs within the country’s borders, creating thousands of direct and indirect jobs and decoupling the national GDP from the whims of international traders.
Furthermore, a modern refinery is a prerequisite for stricter environmental standards, reducing the waste and “lost energy” that characterize obsolete plants.
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