Ghana: Fuel imports set to reach 138,000bpd on back of 2.6% annual growth – Fitch forecasts
Ghana’s reliance on refined fuel imports is expected to persist despite growth in the upstream sector, primarily due to the country’s weak domestic refining industry and bullish fuel consumption forecasts according to research agency, Fitch Solutions.
Over the long term, Fitch Solutions anticipates that Ghana’s consumption of refined fuel will increase steadily at an average annual rate of 2.6%, reaching 138,000 barrels per day (b/d). This robust growth it notes, is driven by a thriving services sector, increased investment in mining and manufacturing, and the overall expansion of economic activity.
However, the outlook for domestic refining capacity is less promising. While crude oil production and exports are expected to experience significant growth, the production of refined fuels is anticipated to stagnate. Throughout Fitch Solutions forecast period, Ghana’s refining capacity is expected to remain at 45,000 b/d. As a result, the country will continue to face a trade deficit for refined fuels, which is projected to worsen from -92,000 b/d in 2023 to -114,000 b/d in 2032.
Nevertheless, there are potential upside risks to the refining capacity and output forecast. The recent government approval of the USD60 billion Petroleum Hub Development project presents opportunities for Ghana’s refining sector. The ambitious project entails the construction of three 300,000 b/d refineries, five petrochemical plants, and new port infrastructure.
If successfully completed, the hub could transform Ghana into a net exporter of refined fuels, provided there is an adequate supply of crude feedstock. However, due to the scale and cost of the project, it is unlikely to be operational by the end of this decade.
In the medium term, Ghana’s net crude oil exports are expected to benefit from the expansion of upstream oil production. While the refining sector faces challenges, increased production in the upstream sector will support the country’s overall crude oil export growth.
Overall, Ghana’s weak domestic refining industry and bullish fuel consumption forecasts indicate a continued reliance on refined fuel imports. The government’s approval of the Petroleum Hub Development project offers potential for future growth in the refining sector, but its realization is likely to be a long-term endeavor.
