By: Dominic Hlordzi
Energy and Associates Ghana has recommended to government to consider leveraging the Ghana Petroleum Funds to subsidize temporary spikes in pump prices to prevent a cost-of-living crisis.
The recommendation follows the surge in crude oil prices as a result of the impact of the U.S.–Iran Conflict on Ghana’s Oil and Energy Markets.
A statement by the think Tank and signed by Director Operations, Research and Communication Ibrahim Kwame Baidoo also called for fast-tracking the establishment of the second gas processing plant to ensure 100% thermal reliance on domestic gas to insulate the power sector from global LNG volatility.
In the early hours of March 2026, the escalation of military conflict between the United States and Iran has triggered immediate volatility in global energy markets.
Following joint U.S.–Israeli strikes on February 28, 2024, Brent crude prices spiked by approximately 8.5%, reaching $79–$82 per barrel within 48 hours.
The statement said as a country balancing its status as a marginal oil exporter and a significant importer of refined petroleum, this conflict presents a “double edged sword” scenario.
‘While it bolsters oil export revenues, it simultaneously threatens macroeconomic stability through imported inflation and increased power generation costs.’
The conflict centres on the Strait of Hormuz, a chokepoint responsible for nearly 20% of global oil and LNG flows.
The statement noted that analysts from Goldman Sachs and J.P. Morgan suggest that a prolonged disruption could drive crude prices toward $100–$120 per barrel.
Increased insurance premiums for maritime transit and potential retaliatory strikes on regional energy infrastructure are already being priced into the market.
Ghana’s oil production, which saw a decline to roughly 36 million barrels in 2025, is currently in a “recovery phase” under the 2026 Budget’s “Resetting for Growth” strategy.
Higher global prices will increase the Petroleum Holding Fund (PHF) inflows, providing the government with
additional fiscal space to fund the “Big Push” infrastructure program potentially.
Energy and Associate Ghana explained that while higher prices usually attract investment, the global “risk-off” sentiment may cause capital flight from emerging markets like Ghana.
‘However, major partners like Tullow and Kosmos Energy have already made commitments in investments for the Jubilee and TEN fields, which serves as a buffer.’
The Impact on the Downstream Sector and Energy Security remains highly vulnerable to the cost of refined petroleum products (Petrol, Diesel, and LPG). The recent surge in global crude is expected to reverse the price stability seen in January 2026.
On the Currency front, increased demand for USD to finance more expensive fuel imports could put pressure on the Cedi, which had recently stabilized at approximately GHS 10.50 to $1.
The government’s 2026 strategy hinges on transitioning to domestic natural gas for 75% of power generation.
The Increased domestic gas output from the OCTP and Jubilee fields (aiming for an additional 150 mcf/day) is critical.
‘If global LNG prices continue to spike due to Middle East tensions, any shortfall in domestic gas that requires “topping up” with imported fuel will significantly increase the cost of electricity.’ The statement explained.
The Energy and Associates Ghana therefore recommend that government should leverage the Ghana Petroleum Funds to subsidize temporary spikes in pump prices to prevent a cost-of-living crisis.
Also fast-track the second gas processing plant to ensure 100% thermal reliance on domestic gas, insulating the power sector from global LNG volatility.
The Bank of Ghana, on monetary policy vigilance must remain prepared to intervene to prevent a speculative slide of the Cedi.
Energy and Associates Ghana will continue to monitor the price behaviour on the global market as the US – Israel strikes on Iran stretches into days and also the situation at the Strait of Hormuz and provide weekly updates on price transmission to the local market.
