Report by Dominic Hlordzi
So, a number of institutions in Ghana have been on edge struggling to settle their electricity bills.
The power distributor, ECG is out there with ‘naked voltage’ demanding payment of accumulated debts owed by its customers.
Among the defaulters, is a ‘near white elephant’, Tema Oil Refinery.
Though it has not processed a tin (“konko in Ghanaian palance”) of crude for years, it is facing threat of disconnection from the national grid.
It has to pay some millions of cedis.
Oh ! the once vibrant ‘catalytic cracker’ simply referred to as TOR, is on its knees begging not to be disconnected.
It is equally begging for oxygen to survive.
Unfortunately, massive imports of fuel are the game now.
The need for African countries to take steps to end or reduce the overdependence on other continents for the supply of finished petroleum products has again been emphasised.
As captured by Statista, the import volume of petroleum products into Africa was at its highest in 2019 at 1.9 million barrels per day.
It fell roughly by eight percent to 1.77 million barrels per day in 2020.
Oil demand in Africa daily was round four million barrels in 2020.
Currently, Ghana, a crude oil producing country, spends about 400 million dollars per month on finished petroleum products imports.
In 2021 about 4.64 million metric tons of petroleum products were consumed in Ghana.
The consumption jumped by about 10 percent from 2020.
With the above figures, it is clear that the continent relies heavily on oil imports to power the various economies.
Continental organisations, nations and associations have over the years tried to promote the downstream petroleum sector but little has been achieved in terms of sustaining refineries.
Refineries across Africa are rather folding up while players resort to imports and distribution of finished products.
Groups such as the African Refiners and Distributors Association (ARDA) which used to champion issues of refineries have metamorphosed into “champions of distributors” of other continents’ products.
The Chief Executive of the National Petroleum Authority, NPA, Dr. Mustapha Abdul-Hamid, is now the President of ARDA.
His nomination was approved in Cape Town, South Africa at the Annual General Meeting of the Association.
As the first ever pan-African organisation for the downstream oil sector in Africa, ARDA said it is on a mission “to be a voice for all African downstream oil stakeholders” and promoter of African energy security by working to enhance the processing of African crude oil in African refineries and the transportation of cleaner fuels through integrated African storage & distribution infrastructure.
What can the new President do?
Key expected deliverables.
1. Stop or reduce fuel imports.
2. Revamp refineries.
3. Promote petroleum production and trade among African nations.
4. Enhance storage capacities.
5. Address fuel transportation bottlenecks.
6. Cause a reduction in fuel prices.
7. And navigating the green energy waters.
Are these ‘barrels’ of expectations too high for Dr. Mustapha Abdul-Hamid?
In an interview, a Petrochemical Engineer and Energy Analyst, Dr. Yussif Sulemana says Dr. Abdul-Hamid’s tenure should help revive refineries and promote the petroleum downstream sector on the continent.
He noted that a lot of pundits have noticed a gradual shift of the core mandate of the Association, which is among other goals, to get refineries to be vibrant while influencing the coming back on stream of the ones in “coma”.
“We need more refineries in Africa and we also need to refine our own crude and also export and not to be perpetual price takers as we have been, which had never guaranteed the continent’s energy security.” He explained.
Dr. Sulemana said if more refineries are operating in Africa, it will help strengthen local currencies and boost trading activities among African countries.
He observed that because most African countries import finished products from Europe, they are faced with exchange rate challenges, citing the never ending challenges the Ghana Cedi faces with the greenback as an example.
“It is my fervent call on the new President, Dr. Abdul-Hamid to ensure that refineries in Africa work, especially in his own backyard, we have the Tema Oil Refinery which is on its knees and struggling for investment opportunities to survive.” The Petrochemical Engineer pleads.
Dr. Sulemana said there is a new refinery that is coming up in Ghana and that the ARDA President must faciltate its speedy birth and the revival of the Tema Oil Refinery to help the country start refining crude again.
As a continent with deposits, proven reserves and even great levels of hydrocarbon production, many have trumpeted the importance of massive refining capacities to churn out finished products to serve the continent instead of overly relying on mostly Europe and America for petroleum products.
Few refineries are functional on the 54 nations continent.
“In 2021, Egypt had the largest oil refinery capacity in Africa, corresponding to 833 thousand barrels per calendar day. Algeria and Libya followed with a refinery capacity of 677 thousand and 634 thousand barrels per calendar day, respectively.”
Many are however excited about the Dangote Oil Refinery, described by some analysts as a “very big and audacious project’,
which is to come on stream soon.
Dr. Sulemana said Nigeria is making serious efforts to break away from this perpetual dependence on imports of finished petroleum products to adding value to the key raw material, crude oil and they are almost there with the Dangote facility.
“If Nigeria can churn out 650 thousand barrels per day into Africa, it will be beautiful ” Dr. Sulemana prays.
The refinery is touted as one of the biggest on the continent with the capacity to process about 650 thousand barrels a day (bpd).
Will this new refinery really support hustle free supply in Nigeria, or West Africa and the continent as a whole? Time will tell.
Drive towards Green-energy discouraging investment.
With green-energy legal instruments gaining ground globally, owners of refineries are ‘losing steam’ and appetite to pump money into refining operations that may turned sour as countries choose to import finished products.
How will the new ARDA leadership walk the path to green energy while encouraging its members to continue with the now tagged ‘dirty energy’?
Daunting task, isn’t it?
“Africa must take its own destiny into its own hands and reduce the continuous dependence on foreign products which hasn’t helped in anyway, so let’s ARDA and other bodies and government rise up to the task though it may be daunting to refine the continent’s own crude.
It is the way to go.” Dr. Sulemana advocates.
Yes, if refineries like TOR are revived, they can then pay all their bills, including electricity bill promptly.