Ghana’s fuel sector is heavily reliant on the international market, as the country imports over 98% of its fuel due to non-functional refineries, according to Nana Amoasi VIII, Executive Director of the Institute for Energy Security (IES).
Speaking on Joy News’ PM Express on Tuesday, March 18, he highlighted how global market conditions dictate domestic fuel prices.
“Happenings in the world market are holding well for our domestic market in terms of price,” he noted. “If the world market price falls, then, of course, there’s a likelihood that domestic fuel prices will also fall.”
However, he stressed that Ghana’s overwhelming dependence on imports makes it highly susceptible to fluctuations in the international market.
“There are probably three or four key variables we look at when we want to predict or forecast the price of fuels in our domestic market,” he explained. “One of the biggest factors is the international price of these fuels because we are largely exposed to external events.”
He attributed Ghana’s reliance on fuel imports to the failure of its refineries.
“Our refineries are not working, except for some like Akwaaba and Platon, which do less than probably 1,000 metric tons per day,” he revealed.
“Tema Oil Refinery is not working, Sentuo Refinery is not working. So we import almost more than 98% of our fuel.”
This heavy dependence on imports exposes Ghana to global shocks, he stressed.
“Whatever happens on the world market hits us here also,” he stated, adding that currency exchange challenges further compound the situation.
“We import in dollars because the fuel we buy is in dollars, the crude oil we buy is equally in dollars, but we sell in cedis,” he explained.
He warned that the depreciation of the local currency worsens the crisis.
“If the importing currency, the dollar, is behaving stronger than our own local currency, at which we sell our fuel and exchange for the next consignment, then, of course, we are also losing at that end.”
His remarks highlight Ghana’s vulnerability in the fuel sector and the urgent need to revamp local refining capacity to reduce dependence on imports and cushion the economy from global market shocks.
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