The Chamber of Petroleum Consumers (COPEC) has called on local refineries in Ghana to pay for crude oil purchases in Ghana cedis instead of US dollars, arguing that the move could help reduce pressure on the local currency and ease demand for foreign exchange.
COPEC Executive Secretary Duncan Amoah says crude oil transactions could be settled in cedis at the equivalent dollar exchange rate, allowing local refineries to purchase crude oil without directly increasing their demand for US dollars.
The proposal comes as oil producers, including Tullow Oil, begin supplying crude oil to domestic refineries as part of efforts to expand local processing and reduce Ghana’s dependence on imported petroleum products.
According to Mr Amoah, adopting cedi-based payments for locally supplied crude oil could help ease pressure on the foreign exchange market, support the cedi and strengthen the country’s domestic refining industry.
Ghana’s petroleum sector relies heavily on foreign exchange for various transactions, including the importation of crude oil and refined petroleum products. COPEC’s proposal seeks to explore how local transactions could be structured to reduce some of that demand for foreign currency.
However, the potential impact would depend on how the payment arrangement is implemented, including whether crude oil suppliers accept cedi payments and how exchange-rate risks are managed.
The proposal also raises questions about the arrangements needed to ensure that local refineries can purchase crude oil at competitive prices while meeting their operational and financial obligations.
Mr Amoah’s call comes amid efforts to retain more value within Ghana’s petroleum sector by increasing domestic refining capacity. If adopted, the arrangement would require cooperation among crude oil producers, refinery operators and relevant industry stakeholders.
The broader objective, according to COPEC’s position, is to strengthen local refining while exploring measures that could reduce pressure on the cedi and improve the resilience of Ghana’s petroleum industry.
Story by Ama Frimpomaa