The Parliamentary Select Committee on Energy in Ghana has announced plans to review the requirement for local oil refineries to pay for the country's crude oil in US dollars. This move comes after concerns were raised that the current arrangement is increasing foreign exchange pressures on domestic refiners. The committee will engage with the National Petroleum Authority and other stakeholders when Parliament resumes in October.
The committee's Chairman, Emmanuel Kwasi Bedzrah, made this disclosure during an inspection of the Sentuo Oil Refinery in Tema. He assured that the committee would look into the matter and consider what needs to be done when Parliament resumes. Two bills, the National Petroleum Authority Bill and the Petroleum Revenue Management Bill, are expected to be brought before the committee, which will examine the issue of how local products sold on the local market are treated.
The review is part of a broader discussion on how Ghana can maximize the value of its crude resources while strengthening the domestic refining industry. Management of Sentuo Oil Refinery has previously expressed concerns about the foreign exchange implications of purchasing locally produced crude in US dollars. The refinery processes crude domestically and sells most of its finished products in Ghana cedis.
Committee Chairman Bedzrah stated that the committee will consider the National Petroleum Authority's position alongside concerns raised by refinery operators before deciding on any possible parliamentary action. The issue has also attracted attention from the Presidency, with President John Dramani Mahama directing the Minister of Energy and Green Transition to review the existing arrangement.
President Mahama's directive aimed to explore whether Tema Oil Refinery and Sentuo could be allowed to pay for locally produced crude in Ghana cedis. Bedzrah emphasized the importance of strengthening Ghana's refining capacity to reduce dependence on imported petroleum products and retain greater economic value from the country's crude oil resources.
The Ranking Member of the committee, George Kwame Aboagye, called for closer cooperation between the government and domestic refineries to address policy and operational challenges affecting the sector. He stressed that policies governing the industry should promote efficient refinery operations and competitiveness while avoiding additional costs that could be passed on to consumers.
The Executive Chairman and President of Sentuo Group, Xu Ningquan, appealed to the committee to support a review of the dollar-payment arrangement, citing the potential to ease foreign exchange pressures and create a more supportive operating environment for local refineries. The International Business and Coordination Director of Sentuo Group, Samson Deen, also called for stronger government-industry collaboration to address foreign exchange and crude supply challenges.
Key points
- The Parliamentary Select Committee on Energy will review the dollar payment requirement for locally produced crude oil in Ghana.
- The review aims to assess whether the current payment system is suitable for a domestic refining industry that largely sells its products in Ghana cedis.
- The committee's review is part of efforts to strengthen Ghana's refining capacity and maximize the value of its crude resources.
