TOR’s 100,000-barrel target could usher in fairer, more transparent fuel pricing – Energy analyst

Achieving the government’s goal of expanding the Tema Oil Refinery’s (TOR) processing capacity to 100,000 barrels per day could fundamentally reshape Ghana’s fuel pricing framework, according to energy analyst Benjamin Nsiah. Speaking on JoyNews’ The Pulse on Monday, Nsiah argued that greater domestic refining output would reduce reliance on imported finished products and pave the way for a more predictable, locally anchored pricing regime.

A Shift from Import Dependency

Ghana currently imports a significant portion of its refined petroleum products, leaving pump prices heavily influenced by international benchmarks, shipping costs, and exchange rate fluctuations. This dependency exposes consumers to global price volatility and adds layers of costs—including freight and insurance premiums—that are ultimately passed on to the public.

Nsiah noted that if TOR, alongside the privately-owned Sentuo Refinery, could collectively meet or exceed domestic demand, the country would no longer need to rely heavily on foreign refiners. “The difference is that there is likely going to be fair pricing of petroleum products locally because all the costs associated with petroleum pricing will be known and also be a bit transparent,” he explained.

The Case for Domestic Benchmark Pricing

Currently, Ghana’s fuel prices are benchmarked against international markers such as Platts Singapore, which reflect global supply and demand dynamics rather than local production realities. However, Nsiah argued that sufficient local output would necessitate a new pricing model.

“But if TOR and Sentuo are able to do what we consume and even export, it means that we need a pricing regime whereby we set our own benchmark prices,” he said. Such a system, he added, could help stabilise prices and even make fuel comparatively cheaper for consumers by eliminating import-related markups.

Curbing BDC Premiums and Price Distortions

One of the key benefits of self-sufficiency, Nsiah emphasised, is the potential to reduce the premiums that Bulk Distribution Companies (BDCs) often quote due to supply uncertainties and currency risks. “Total production will be able to meet total demand, thereby issues of premiums being quoted by BDCs will be dealt with,” he said. “So there is likely going to be fair pricing.”

Broader Economic Ripples

Beyond pricing, expanding TOR’s capacity would generate significant economic dividends. Increased refining activity would spur industrial growth, create jobs in downstream sectors, and reduce the country’s foreign exchange outflows on fuel imports—a critical relief given the current pressure on the cedi. Additionally, a robust local refining sector could enhance Ghana’s energy security and reduce vulnerability to supply chain disruptions.

Challenges and Realities

However, achieving the 100,000-barrel target is no small feat. TOR has historically struggled with operational inefficiencies, financial constraints, and maintenance backlogs. The government has pledged to rehabilitate the refinery and secure financing for upgrades, but progress has been slow. Nsiah acknowledged these hurdles but stressed that the long-term payoff—both in pricing fairness and macroeconomic stability—makes the investment worthwhile.

A Vision for the Future

If realised, TOR’s expansion, combined with Sentuo’s existing capacity, could position Ghana as a net exporter of refined products in West Africa. That shift would not only transform the domestic pricing architecture but also strengthen the nation’s bargaining power in regional energy markets.

For now, consumers continue to grapple with high pump prices and a weakening cedi. But analysts like Nsiah believe that achieving refining self-sufficiency is the surest path to sustainable, affordable, and transparent fuel pricing—free from the whims of international markets and speculative margins.

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