Ghanaians Could See Lower Fuel Prices if GNPC Accepts Cedis for Crude Oil — TOR MD

The Managing Director of the Tema Oil Refinery (TOR), Edmond Kombat, has indicated that Ghanaians could experience lower fuel prices if the Ghana National Petroleum Corporation (GNPC) is permitted to accept payments in cedis for crude oil supplied to the refinery.

Kombat explained that the current arrangement requires the Tema Oil Refinery to purchase crude oil from GNPC in US dollars, a situation he believes could change if Cabinet and Parliament approve a proposal allowing the corporation to receive payments in the local currency.

According to him, the proposed change could help ease some of the financial pressures associated with crude oil purchases and potentially contribute to a reduction in the cost of petroleum products on the Ghanaian market.

“TOR buys crude from GNPC in dollars. Ghanaians should expect lower fuel prices when Cabinet and Parliament approves for GNPC to accept cedis,” Kombat stated.

His comments highlight the relationship between crude oil procurement, foreign currency requirements and the pricing of petroleum products in Ghana, where movements in the exchange rate can influence the cost of importing and purchasing oil-related products.

The use of US dollars in crude oil transactions means that the refinery must account for the exchange rate when making payments, exposing its operations to changes in the value of the cedi against the dollar.

Allowing GNPC to accept cedis could reduce the need for the refinery to source dollars for those particular transactions, depending on the final arrangement approved by the relevant authorities.

However, the potential impact on pump prices would depend on several factors, including the terms of the proposed payment system, the cost of crude oil, exchange-rate movements, refining expenses and other charges that contribute to the final price of fuel.

Cabinet and Parliament would need to approve the proposed arrangement before GNPC could implement the change, making their decisions important to the possibility of adopting the local currency for the transactions.

The Tema Oil Refinery plays a significant role in Ghana’s petroleum sector, and changes to its crude oil procurement arrangements could have implications for its operating costs and the wider downstream petroleum industry.

For consumers, fuel prices remain an important economic concern because changes at the pumps can affect transportation fares, the cost of moving goods and the prices of various products and services.

Kombat’s remarks therefore place the proposed cedi payment arrangement at the centre of discussions about reducing petroleum costs, although any actual reduction in fuel prices would depend on the implementation of the policy and its effect on the refinery’s overall expenses.

Until the necessary approvals are secured, the existing dollar-based arrangement remains the basis of the crude oil transactions described by the TOR managing director, while the proposed change offers a possible route towards easing some of the financial pressures affecting the refinery.

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