Oil Discovery in Ghana is a ‘Resource Curse’ – COPEC
Mr. Sampson Addae, the Research and Monitoring Officer at the Chamber of Petroleum Consumers (COPEC), has classified the discovery of oil in Ghana as a “resource curse” rather than a “resource blessing.” He attributed this perspective to the fact that Ghana, despite its oil discovery, does not possess the capability to refine its own oil due to the inoperability of the Tema Oil Refinery.
In an interview on Opemsuo Radio’s Nkwantannanso with George Adjei on August 16, he outlined that Ghana’s practice involves exporting its extracted oil to other nations for refining, subsequently importing the finalized products. This procedure leads to the accrual of charges and taxes throughout the process.
Mr Addae emphasized, “Despite having discovered oil in Ghana, the Tema Oil Refinery has not been functional since 2017. So, when we extract the oil, we send it abroad for refining and buy the finished product. This involves expenses for shipping and refining in dollars, followed by purchasing the end products with additional charges. When all these costs, along with taxes, are calculated, it significantly raises the price.”
He also highlighted a critical concern at the Tema Oil Refinery: a malfunctioning machine called the Fluid Catalytic Cracker, which was replaced in 2002 at a cost of 500 million dollars. He speculated that repairing it this time might demand 800 million to 900 million dollars.
He posed the question, “Can’t Ghana afford it?”
Furthermore, he pointed out that countries like Saudi Arabia are deliberately fostering scarcity by decreasing their oil output for the global market. These nations have also announced plans to raise the spot price by September 1.
He concluded that under these circumstances, prices of petroleum products are likely to continue rising unless Ghana takes the initiative to refine its own oil.
Fuel prices have increased. Multiple oil marketing companies (OMCs) have initiated the process of increasing petroleum product prices at stations.
Notably, TotalEnergies has adjusted the price of petrol from ¢12.45 per litre to ¢13.50 per litre. Similarly, the cost of diesel has risen to ¢13.90 per litre from the previous rate of ¢12.45 per litre.
Goil, a significant player in the market, has also followed suit by raising petrol prices to ¢13.50 and diesel to ¢13.90 per litre.
It’s expected that other OMCs will also make adjustments to their prices.
Story by Adwoa S. Danso
