Ghana’s return to domestic refining could lose much of its strategic value unless locally produced crude is made available to refineries through a predictable, rules-based system, the Institute for Energy Security (IES) has warned.
In a new policy paper, the institute argues that the country already has the legal tools to require upstream petroleum contractors to supply crude to the domestic market, making implementation rather than new legislation the more immediate policy challenge.
The argument comes at a critical point for Ghana’s refining ambitions.
The Tema Oil Refinery (TOR) has resumed operations following its turnaround programme, while government continues to position domestic refining as an important part of reducing dependence on imported petroleum products.
For IES, however, restarting the refinery is only one part of the equation.
Without dependable feedstock, restored processing capacity could once again become constrained by the availability and timing of crude.
Domestic Supply Remains The Missing Link
The policy paper points to Section 71 of the Petroleum (Exploration and Production) Act, 2016 (Act 919), which gives the Energy Minister the authority to require petroleum contractors to sell a specified portion of their petroleum entitlement for domestic supply.
Regulation 32 of L.I. 2359, as amended by L.I. 2390, provides the framework for implementing that obligation, including the determination of volumes, delivery arrangements, pricing and mechanisms for resolving disputes.
The significance is that Ghana does not necessarily need to create a new domestic crude supply policy.
The existing framework can be activated more consistently.
IES contends that the limited visibility of the notices, calculations and procedures contemplated under the regulation has left crude supply to local refineries dependent too heavily on individual arrangements.
That creates a fundamental mismatch.
Refinery operations require forward planning, but intermittent crude allocations make it difficult to establish predictable production schedules, manage inventories and plan purchases and maintenance around sustained throughput.
The institute therefore sees the enforcement of the Domestic Market Obligation (DMO) as a way of replacing uncertainty with a recurring supply mechanism.
“A restored refinery does not by itself guarantee restored refining output; it guarantees only the physical capacity to process crude, provided that crude is actually delivered.”
IES
That distinction is arguably the most important part of the IES position.
Ghana’s refining debate has often centred on whether the country has enough processing capacity.
The more immediate question after TOR’s return is whether the refinery can obtain enough crude, consistently enough, to operate at commercially meaningful levels.
TOR’s Turnaround Raises The Stakes
According to the IES paper, TOR’s turnaround maintenance programme ran from August to October 2025, with refining operations resuming in December.
The refinery is reported to be operating at about 28,000 barrels per stream day, compared with its 45,000-barrel nameplate capacity, while longer-term plans envisage further expansion.
Those figures underline why feedstock security matters.
A refinery does not create energy security merely by existing. Its contribution depends on sustained utilisation.
Ghana has already demonstrated the consequences of having refining infrastructure without the conditions required for consistent operation.
Years of underperformance at TOR were shaped by a combination of technical, financial and operational difficulties.
A return to production without a dependable crude-supply arrangement risks leaving one of those structural weaknesses unresolved.
Government has already allocated Jubilee crude to TOR, including a reported one-million-barrel allocation.
IES does not dismiss such interventions; rather, it argues that allocations of this nature should evolve into a predictable framework governed by the existing regulations.
That would represent a shift from securing crude when the need becomes immediate to planning domestic supply as part of the country’s petroleum system.
Foreign Exchange Benefits Depend On The Structure
The case for domestic crude supply also extends beyond keeping TOR running.
Ghana imports significant volumes of finished petroleum products, creating recurring demand for foreign exchange.
Increasing the proportion of petroleum products processed domestically could retain some refining and associated economic activity within the country while reducing dependence on international product supply chains.
But the foreign-exchange benefit should not be overstated.
Domestic refining does not mean Ghana becomes insulated from international oil prices.
Crude remains an internationally traded commodity, and domestic refiners must still operate within commercially credible pricing conditions.
IES therefore makes an important qualification: domestic crude obligations must be structured in a way that does not simply transfer the financial risk from refiners to upstream producers.
Pricing, settlement arrangements and exchange-rate adjustments will matter.
The experience of Nigeria, highlighted in the paper, illustrates the danger of creating a domestic supply arrangement without adequately addressing the currency exposure between crude purchases and local fuel sales.
For Ghana, that is particularly relevant because the success of a DMO should ultimately be measured not only by barrels delivered to a refinery but by whether the arrangement remains commercially sustainable for every participant in the petroleum value chain.
Regional Experience Offers A Warning
The institute uses Nigeria and Indonesia to demonstrate two different approaches to domestic crude obligations.
Nigeria’s experience shows that having a formal domestic supply requirement does not automatically guarantee sufficient crude for domestic refining.
Shortfalls can force refineries to return to international markets for feedstock, potentially undermining some of the foreign-exchange and supply-security objectives of the policy.
Indonesia provides a different model, with domestic supply requirements embedded more directly into production-sharing arrangements.
The lesson for Ghana is less about copying either country than about designing a system that gives both upstream producers and domestic refiners clarity before transactions take place.
That predictability is important for investment as well.
A refinery seeking financing cannot reasonably plan around uncertain access to crude, while upstream contractors need to understand in advance how much production could be subject to domestic supply requirements and how that crude will be priced.
Enforcement Could Change Ghana’s Refining Strategy
IES is calling for the 90-day notices contemplated under Regulation 32 to be formally implemented, alongside annual domestic supply calculations and greater disclosure of the volumes allocated to the domestic market.
The institute also proposes stronger transparency around pricing calculations and the independent-expert mechanism available for resolving disputes.
Such measures would make the DMO less dependent on political discretion and more closely tied to a transparent regulatory process.
That is where the policy proposal becomes more significant than TOR alone.
A functioning domestic crude-supply regime could provide a common framework for Ghana’s refining industry as additional facilities and capacity emerge.
The objective should not be to guarantee crude to one refinery regardless of commercial realities.
It should be to establish a transparent system through which domestic refining capacity can be matched with a defined portion of Ghana’s petroleum production.
For the wider energy sector, that would create a stronger connection between upstream production and downstream value addition.
Ghana’s petroleum strategy has increasingly emphasised keeping more value from its natural resources within the country.
That ambition cannot stop at producing crude. If domestic refineries have the technical ability to process it, reliable access to feedstock becomes an essential bridge between petroleum production and local industrial value creation.
The immediate test, therefore, is whether TOR’s return to operation becomes a durable change in Ghana’s downstream petroleum structure or another period of activity followed by operational constraints.
IES’s argument is compelling on one central point: refinery rehabilitation without feedstock security solves only half the problem.
The real measure of Ghana’s refining revival will be whether domestic crude can move predictably from the upstream sector into functioning refineries and, ultimately, into a more resilient domestic fuel market.
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