Ghana has imported US$1.008 billion worth of oil and gas in the first five months of the year, signaling an increase in imports of the commodity over the same period in 2020 which totaled US$796.57 million.

This reflects a pickup in productive activities among sectors which require use of the commodity, including the downstream petroleum sector, other oil and gas dependent manufacturing firms, transport services and maritime trade.

According to the Bank of Ghana Statistical bulletin, crude oil imported into the country for the series of months under review amounted to US$18.03 million (excluding May 2021 import value) compared to US$136.55 million during the same period in 2020.

Also, premium imported totaled US$412.63 million compared with US$238.11 million worth of premium during the same period in the previous year. Gas oil accumulated US$392.4 million compared with US$76.35 million in the same period last year.

Furthermore, liquefied petroleum gas (LPG) imports amounted to US$50.63 million, reflecting a rise of more than US$12 million compared with the same period in 2020. Also, aviation fuel hovered around US$32.72 million compared with only US$9.63 million in the first five months of the previous year. Gas imported via the West African Gas Pipeline (WAGP) in the first five months of the year also totaled US$66.04 million, US$10.31 million below imports during the same period last year.

Contributing to such huge imports of petroleum products, which appears to have been perpetuated for years, is due to the fact that, in part, Tema Oil Refinery (TOR), the nation’s sole oil refinery has not been able to meet its full capacity utilization.

TOR’s capacity to refine nation’s crude oil

According to the Ghana Energy Commission, Ghana’s petroleum production requirement far exceed the capacity of TOR with the shortfall estimated in the range of 26-30 per cent under the assumption that TOR is operating at over 90 per cent capacity utilization.

Recent import statistics on petroleum products in 2019 showed that petroleum products made up 71.9 per cent of total amount of energy imported into the country whilst in 2018, it constituted 84.2 per cent of total energy products imported.

Despite the decline, this reflects a huge proportion of imports of petroleum products. This indicates that the country depends heavily on imported petroleum products to meet its energy demand as demonstrated above.

On the other hand, crude oil exports throughout the period under review fared well in comparison to the performance of the commodity in the same period last year. The value of crude oil exports increased to US$1.48 billion in the first five months of the year compared with US$1.18 billion in the same period last year.

The country’s crude oil exports begun this year on a strong footing owing to the appreciable rise of crude oil prices in the international market averaging US$65/barrel within the first five months of the year relative to as low as US$32/barrel as of May 2020.

With investments in petroleum products dwindling and oil majors shifting resources elsewhere (renewable energies), this attaches a very profound importance to the need for immense support to the nation’s sole oil refinery to reach its full capacity.

Such an action therefore reduces the country’s high import dependence on oil and gas products.