Energy Policy Analyst Benjamin Nsiah says Ghana can significantly reduce the impact of possible increases in global crude oil prices by increasing local refining and integrating the country’s upstream oil production with the downstream petroleum sector.
Speaking on Ahotor FM’s Adekyee Mu Nsem programme in Accra on August 24, 2026, Mr. Nsiah was commenting on the possible impact of new economic sanctions by the United States against Iran and concerns that Iran could respond by disrupting oil exports through the Strait of Hormuz.
He said any serious disruption around the Strait of Hormuz could create a bullish sentiment on the international oil market and push crude oil prices higher.
Mr. Nsiah explained that although Ghana is not directly dependent on crude oil from the Gulf region, the country remains exposed to global oil price movements because the petroleum market is internationally connected.
He said Ghana’s private-sector-dominated downstream petroleum industry relies heavily on imported finished petroleum products, with supplies coming from countries including India, parts of the Western market and, at times, South Africa.
According to him, any increase in international crude oil prices could therefore translate into higher fuel prices in Ghana.
However, Mr. Nsiah believes Ghana can reduce its vulnerability by making better use of the crude oil produced locally.
He said Ghana produces approximately seven million barrels of crude oil annually and argued that the country must do more to integrate its upstream production with the downstream petroleum sector.
He noted that some of Ghana’s oil-producing blocks are increasing their output, citing the Jubilee field, where production has reportedly increased by about 10,000 barrels.
For him, producing crude oil without adequately connecting it to domestic refining does not provide the full benefit to Ghanaian consumers.
He said the country should create a system where crude produced in Ghana can be refined locally and the resulting petroleum products supplied to the domestic market.
Mr. Nsiah explained that importing finished petroleum products comes with additional costs, including cost, insurance and freight (CIF), as well as trading platform-related charges.
These costs, he said, are eventually reflected in the prices consumers pay at the pump.
He therefore argued that greater local refining could help reduce some of these additional cost components and provide Ghana with greater control over the domestic petroleum value chain.
According to Mr. Nsiah, Ghana must therefore pursue stronger integration between the upstream and downstream sectors.
He also called for an appropriate benchmark pricing system for locally refined petroleum products.
He explained that petroleum products have different quality levels, including variations in sulfur content, and these differences must be considered when determining prices.
He said domestic refineries must be supported to produce petroleum products that meet the required quality standards while remaining competitive with imported products.
Mr. Nsiah stressed that the objective should not be to protect local refineries at the expense of consumers, but to create a competitive environment in which locally refined products can compete favourably with imported petroleum products.
He said greater local refining would strengthen Ghana’s petroleum value chain and help reduce the country’s exposure to external shocks.
Mr. Nsiah acknowledged that Ghana cannot completely insulate itself from global oil price movements, since crude oil is traded on the international market.
However, he maintained that increasing local refining capacity would enable Ghana to control some of the costs that contribute to fuel prices.
He urged policymakers to focus on increasing domestic crude production, attracting investment into refining, strengthening existing refineries and creating stronger links between crude production and local petroleum consumption.
He said Ghana’s long-term strategy should not only be about responding to international price increases after they occur, but also about building a petroleum sector capable of absorbing some of the external shocks.
Mr. Nsiah maintained that if Ghana can increasingly refine its own crude oil locally, the country could reduce its dependence on imported finished petroleum products and make fuel prices comparatively more competitive.
He said such a strategy would not completely shield Ghana from the consequences of geopolitical developments involving Iran, the United States or the Strait of Hormuz, but it could help moderate the impact of international oil price increases on Ghanaian consumers.
Story by Stephen Kwaku Owusu Mintah
Ahotoronline, Accra.
