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Ghana may soon source petroleum products from Nigeria’s Dangote Petroleum Refinery once it reaches full operational capacity, potentially reducing reliance on pricier imports from Europe, the head of Ghana’s oil regulatory agency announced on Monday. The shift is expected to bring down fuel costs, offering a more affordable and regional option for the West African nation.
Ghana could save $400 million monthly on fuel imports from Europe by sourcing petroleum from Nigeria’s Dangote Refinery, said Mustapha Abdul-Hamid, Chairman of the National Petroleum Authority. Speaking at the OTL Africa Downstream oil conference in Lagos, Abdul-Hamid stressed the potential financial relief for Ghana, according to Reuters.
Nigeria’s $20 billion Dangote Refinery, located in Lekki, began its first release of Premium Motor Spirit, also known as petrol, into the national market on September 15, 2024. This move represents a major step toward achieving energy self-sufficiency and supporting local fuel demands.
Following the complete deregulation of Nigeria’s downstream oil sector by the Federal Government, marketers have resumed large-scale importation of Premium Motor Spirit (PMS), bringing in hundreds of millions of liters even after the Dangote Refinery’s production rollout. This continued import activity underscores the challenges facing local supply in a newly liberalized market.
Speaking at an event in Lagos on Monday, a representative from Ghana’s petroleum authority announced that Ghana is considering importing fuel from Nigeria’s Dangote Refinery. This potential shift aims to reduce Ghana’s reliance on more expensive fuel sources, aligning with regional economic cooperation goals.
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“If the refinery reaches 650,000 bpd a day capacity, all that volume cannot be consumed by Nigeria alone, so instead of us importing as we do right now from Rotterdam, it will be much easier for us to import from Nigeria and I believe that will bring down our prices.” Hamid said.
The Dangote refinery built by Nigerian billionaire Aliko Dangote is expected to operate at near full capacity at the end of the year and analysts believe it could be fully operational in the first quarter of 2025.
Hamid said importing from Nigeria rather than Europe would bring down the prices of other goods and services by removing freight costs. Eventually, he said African countries would agree on a common currency that should dampen demand for dollars.
Ghana’s economy, which grew by 6.9 per cent year-on-year in the second quarter of 2024, has been driven largely by a strong expansion of the extractive sector which has boosted demand for fuel.