Accra: President John Dramani Mahama has instructed the Minister of Energy to "rethink and take a second look" at how the Tema Oil Refinery (TOR) and Sentuo can pay for Ghana's indigenous crude oil using the local currency, the Ghana cedi, rather than the US dollar when they take delivery of the oil produced locally offshore in the Western Region.
According to Ghana Web, the Minister of Energy and Green Transition, John Jinapor, disclosed this directive during the commissioning of the refurbished Crude Distillation Unit (CDU), the Residue Fluid Catalytic Cracking Unit (RFCC), a 120-ton steam boiler, a new F-61 Crude Heater, and other upgraded facilities of the state-owned Tema Oil Refinery on Saturday. The ceremony also marked the official receipt of one million barrels of Ghana's indigenous Jubilee Medium Sweet Crude delivered to TOR aboard the MT Apache for local refining.
Dr. John Jinapor explained that President Mahama had questioned why TOR and Sentuo, after taking and processing the crude oil and selling it in Ghana cedis, were required to pay for it in US dollars. This inquiry was raised during a meeting at President Mahama's residence, attended by the Governor of the Bank of Ghana and the Minister of Finance. The President's suggestion to pay using the local currency aimed to alleviate pressure on the country's foreign exchange reserves.
The minister further explained to President Mahama that, under the Petroleum Holding Fund and the Petroleum Revenue Management Act, TOR and Sentuo are currently mandated to secure dollars for these payments. However, President Mahama directed Jinapor to explore the possibility of paying in cedis, emphasizing the potential benefits of reducing forex market pressures and associated costs.
Crude oil is traditionally priced and traded in United States dollars as per standard industry practice. This requirement is enshrined in Ghanaian law, which mandates that payments for crude oil, including locally produced crude, be made in foreign currency.
During the ceremony, President Mahama noted that TOR had received three separate shipments of one million barrels of crude oil since May, including Bonga, Baleine, and Ghana's Jubilee Medium Sweet crude. He highlighted that two million barrels had already been refined into petroleum products, with the payment for the Jubilee crude cargo completed.
President Mahama also charged the Minister of Energy and the TOR board to develop a strategic plan to increase the refinery's processing capacity to 100,000 barrels per day. He emphasized removing political interference from TOR's operations and noted that the refinery's recent progress had been achieved without government funding.