Ghana Removes Fuel Subsidy, Introduces New Reforms
Ghana has implemented regulatory measures in the downstream sector, including the removal of fuel subsidy to ensure stability in the sector.
The Chief Executive Officer (CEO) of Ghana’s National Petroleum Authority, NPA, Abdul Hamid stated this during a presentation at the ongoing Africa Refiners and Distributers (ARDA) week 2023, in Cape Town, South Africa.
He said the measures were implemented in response to the global oil and gas market volatility caused by the Russian-Ukraine war and energy transition-related policies.
“For the first time in 30 years, we have installed fuel caps as a measure to intervene and to control market instability,” he said.
Hamid said this has helped to restrict uncontrolled increases in fuel and energy prices at the peak of the global market instability since the conflict between Russia and Ukraine started.
“We have removed subsidies and deregulated our markets. Industries were shutting down because government was finding it hard to find the money to provide subsidies and to this day industry is being powered by investments in the private sector and there are no complains of supply,” he said.
“We are ensuring affordability and security for the vulnerable consumers through the removal of energy subsidies.”
Gold for Oil
The NPA boss also spoke about the ‘gold-for-oil’ program, in which the country is leveraging its vast gold resources to buy petroleum from international markets.
“We exchange gold directly for petroleum products from international firms. We buy the gold directly from large and small mining firms and exchange it with petroleum. This has stabilised our industry and kept energy prices affordable,” he said.
In addition, Hamid said the NPA has created a special fund to assist refineries in boosting their capacity to 50 barrels of oil in order to meet the country’s growing demand.
He explained that this was due to the lack of adequate refinery capacity, which he stated was one of Ghana’s major challenges impeding the exploitation of local oil and gas resources to drive energy sector growth.
“Ghana has also ensured the NPA is a one-stop-shop for everything required for firms to participate in the country’s oil and gas industry. By so doing, we have the time spent in registering and getting projects and firms up to the ground.”
The NPA CEO also highlighted the roles of the gas master plan, the renewable energy plan and trade policy in maximising the country’s energy mix diversification.