Ghana’s fuel sector is at the mercy of the international market, as the country imports over 98% of its fuel due to non-functional refineries, according to Nana Amoasi VIII, the Executive Director of the Institute for Energy Security.

Speaking on Joy News’ PM Express on Tuesday, March 18, he highlighted the dire state of Ghana’s fuel industry and how global market conditions dictate domestic 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 emphasised that Ghana’s overwhelming dependence on imports means any fluctuations in the international market directly impact local prices.

“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.”

According to Nana Amoasi VIII, Ghana’s reliance on fuel imports is primarily due 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. The situation is further compounded by currency exchange challenges.

“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 situation.

“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.