Ghana is considering importing petroleum products from Nigeria's Dangote Petroleum Refinery to reduce its reliance on more expensive European imports.
This strategic move, as articulated by Mustapha Abdul-Hamid, chairman of the Ghana National Petroleum Authority (NPA), aims to cut down the country's monthly fuel import costs from Europe, which currently stand at approximately $400 million. The decision was discussed during the OTL Africa Downstream Oil Conference in Lagos.
The Dangote Refinery, owned by Nigerian billionaire Aliko Dangote, is expected to operate at near full capacity by the end of 2024, with full operational status anticipated in the first quarter of 2025. The refinery boasts a production capacity of 650,000 barrels per day (bpd), a volume that exceeds Nigeria's domestic consumption needs.
Consequently, Ghana sees an opportunity to source its petroleum products from this facility, thereby reducing freight costs associated with European imports.
Abdul-Hamid emphasized that importing from Nigeria rather than Europe would not only lower fuel prices but also decrease the cost of other goods and services by eliminating massive freight expenses. Additionally, he suggested that a common African currency could further stabilize regional economies by reducing the demand for dollars.
Ghana's economy, which experienced a 6.9% growth year-on-year in the second quarter of 2024, has been largely driven by the expansion of its extractive sector, increasing the demand for fuel. By shifting its import strategy to include the Dangote Refinery, Ghana aims to bolster its economic stability and reduce inflationary pressures.
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