The Institute for Energy Security (IES) says the Tema Oil Refinery (TOR) is well-positioned to solve the frequent increments in fuel prices.
Oil Marketing Companies (OMCs) have in a single pricing-window, increased fuel prices thrice, making the price of a litre of diesel increase by 79 per cent, while petrol has increased by 95 per cent, cumulatively.
A market analysis by IES shows that the increment by the OMCs, together with global and domestic factors, increased the average price of diesel from GHS6.50 to GSH23.19 and petrol, GHS6.50 to 17.48 from January to November 3, 2022.
The President, Nana Addo Dankwa Akufo-Addo, announced on Sunday that the Government was working to secure reliable and regular sources of affordable petroleum products to help stabilise fuel prices.
However, in an interview with the Ghana News Agency on Thursday, Nana Amoasi VII, the Executive Director of IES, said Ghana could best solve the frequent hikes in fuel prices through domestic means.
He, therefore, called on the Government to urgently give part of its equity to private investors to ensure that TOR was captalised, revamped, and positioned to work efficiently to supply constant crude oil.
He said fuel supply reliability was within, noting that the first place Ghana could look at in that regard was the Tema Oil Refinery, vital in meeting the fuel supply reliability and security demands.
Nana Amoasi VII said: “TOR can refine not less than 45,000 barrels per stream a day (bpsd). The key component is ready, at least 65 per cent of the storage tanks, including the crude tanks are in good state to work, and their pipelines are not in deplorable state.
“If TOR should come back on stream, we’ll be able to meet roughly 50 per cent of our national demand and ensure that supply reliability that we’re looking for. TOR can build a synergy with the upstream sector so that we can maximise the value of our crude oil,” he added.
He noted that such a move would help keep strategic stock for the country through partnership with the Bulk Oil Storage and Transportation Company (BOST) and ‘empower’ the Cedi.
Nana Amoasi VII also asked the Government to take immediate steps to stabilise the Cedi, including making adequate dollar available to importers as well as use some of the windfall from the crude oil sales to cushion Ghanaians.
The Executive Director said the increase in international market price of crude oil, which contributed about 70 per cent of the input cost of diesel, petrol, LPG and aviation thermal kerosene, was a major external factor driving the fuel price hikes.
Other external factors, he said, included the decision by OPEC to cut down on production, the growing demand of oil across the world, and the impact of the Russia-Ukraine war.
He explained that because Ghana was largely an oil-importing country, anytime such external factors increased fuel prices on the international market, its direct impact was felt on the local market.
Locally, he attributed the fuel price hikes to the depreciation of the Cedi particularly against the dollar, the inability of the Bank of Ghana (BoG) to meet the dollar demands of importers, who therefore, resorted to the illegal forex market (black market).
Nana Amoasi VII noted that importers required between $380 million to $400 million every month, but BoG could only meet close to 40 per cent of that demand, with many resorting to the black market.
“In that case, it delays their payment to their suppliers, and this comes at a cost. That cost will be added to price of fuel for the importers, and we’ll feel it at the pump,” he said and called for willingness on the part of the Government to address those issues.