The Ghanaian government has announced the removal of fuel subsidy to ensure stability across its downstream sector.
Abdul Hamid, chief executive officer (CEO) of NPA, spoke 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.
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.
Speaking on more reforms implemented in the industry, Hamid said the Ghanaian government, through the NPA, has also removed energy subsidies.
“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.”
Hamid said the NPA has also 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,” Hamid said.
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.
He added that the exploration of liquefied petroleum gas, as well as natural gas, will boost electricity generation, consumer access to clean cooking, and ensure environmental sustainability.
“There must be a healthy balance of energy equity, accessibility and environmental sustainability in driving energy market growth,” Hamid said.
“We want to transform through natural gas which is the cleanest form of energy to date, while accelerating local content development. We also want to use carbon credits to innovate our financing mechanisms.”
Hamid also called for increased collaboration between African countries and downstream sector players, as well as between private and public sector institutions, to ensure energy supply security and affordability.
