Last year, Ghana spent some US$2 billion to import 3.46 million tonnes of refined petroleum products for domestic consumption.
The refined products – including diesel, petrol, liquefied petroleum gas (LPG) and marine gas oil (MGO) – were needed to fuel cars and ships, power industries and keep thermal plants running for existing and new factories to operate.
With the Tema Oil Refinery (TOR) unable to refine crude oil for the domestic market since 2014, it is obvious that all national demand was met and is still being met by imports, a development which clearly puts a strain on the economy in many ways.
As domestic demand for imported products increases, the country is required to further draw down its already depressed foreign reserves to be able to fund supplies of these products.
That results in lean cover for the cedi, thereby exposing it to further depreciation against foreign currencies.
Increased imports of finished petroleum products also mean that the country is creating sustainable jobs in other countries, while collapsing same in Ghana.
It was in anticipation of these and many other challenges that the country’s only national refinery was established in 1960, first as Ghanaian-Italian Petroleum (GHAIP) and later as TOR.
However, like many state institutions, TOR has had its fair share of challenges, ranging from mismanagement, corruption, political interference and lack of a workable national strategy to sustain refinery activities for the domestic and sub-regional markets.
The result has been a pile-up of debts and increased attrition of skills from the refinery, leaving behind a pale TOR that struggles to stand on its feet.
Over the period, various attempts have been made to revive the refinery and return it to its glory days when it refined enough products for the domestic market and left some for export.
The latest involves a bold attempt to ensure sustainable processing of crude after four years of intermittent tolling for third parties.
In line with that, the refinery has secured some 947,000 barrels of crude oil from BP Oil, making it possible for refinery work to resume next week.
While the Daily Graphic commends the government, the board and the management of TOR for putting in place appropriate measures to earn the confidence and faith of BP Oil, we wish to entreat them to be guided by history.
In years past, TOR had made similar comebacks, only to allow its age-old challenges to eat it up and consequently return to debt.
It is, therefore, advisable that management prioritises efficiency and product integrity to help sustain the revival of the refinery.
This will help reduce losses and further endear the refinery to oil traders for supply deals similar to the one signed with BP Oil.
While we are at it, we further encourage the government to make the revival of TOR one of its top concerns.
Doing that requires obtaining long-term crude oil supply deals for the refinery under terms that are flexible and profitable.
It is instructive to note that beyond cutting down our dependence on imports and their drain on the economy, a revived TOR is a strong catalyst for the realisation of the government’s plans to make Ghana a petroleum hub in the sub-region.
A revived, healthy and functioning TOR will be evidence that the country has the requisite expertise and policies to be able to meet its petroleum needs, as well as those of other countries in the West African sub-region.
There is every reason for TOR’s return to be sustained.