Ghana’s President, John Mahama, has ordered a review of dollar payment for its crude oil sales direct to cedis in order to ease pressure on the local currency.
This new policy regime would allow for the country’s refineries including Tema Oil Refinery, to pay for Ghanaian oil in the local currency thus breaking a rule that forces them to buy US dollars for crude pumped from Ghanaian soil.
Giving insights on the proposal, Dr. John Jinapor, Ghana’s Energy Minister, during a monitored television magazine programme in Ghana, recalled how a directive from the President inspired the whole change.
Going down memory lane, Jinapor recalled that “I was at Mr. President’s house, and he said, ‘when the Tema Oil Refinery takes delivery of crude how do they pay?’ Then I said, ‘Mr. President, in accordance with the Petroleum Holding Fund and the Petroleum Revenue Management Act, you have to go and look for dollars and pay in foreign currency.’ Then he gave me instructions. Fortunately, the Finance Minister and the Central Bank of Ghana Governor were around. He said rethink, take a second look at it. When Tema Oil Refinery takes the crude process and sells it in Ghana cedi; why don’t we pay Ghana cedi into that account rather than going to the forex and buying dollars. And then the CBN Governor said, “Yes, Mr. President you’re right! Because when we go to the market and we buy forex, we put pressure on our currency. We add cost to it. So next week let’s have a meeting so that we can restrategise.”
From available information, Tema Oil Refinery and the private Sentuo refinery process crude and sell fuel in cedis, yet the Petroleum Revenue Management Act obliges them to pay for the feedstock in foreign currency.
The instruction came as TOR received one million barrels of Ghana’s own Jubilee Medium Sweet crude aboard the MT Apache on 1 August, alongside newly refurbished crude distillation unit, a residue fluid catalytic cracking unit, a 120-tonne steam boiler and a new crude heater.
This policy, modeled after Nigeria, which began naira-for crude sale in October 2024, has been considered a major shift for the management of state-own resources by the two West African countries.
The central bank governor agreed that buying dollars on the market puts pressure on the cedi and adds cost; a structuring meeting is due within days.
The answer lies in the law. The Petroleum Revenue Management Act and the Petroleum Holding Fund framework require payment for crude — including Ghana’s own — in foreign currency, in line with the industry’s global practice of pricing oil in dollars.
The stakes are visible at the pump. Ghanaians watched fuel prices climb this month as crude rose and the cedi slipped, a squeeze The Rio Times covered in its August fuel-price report. Fewer dollar purchases along the supply chain would not cap prices, but they would remove one self-inflicted cost.
Recall that the Federal Executive Council (FEC) approved President Bola Tinubu’s directive for the Nigerian National Petroleum Company Limited (NNPCL) to sell crude oil to domestic refineries (such as Dangote Refinery) in naira, and began formal implementation of the “Naira-for-Crude” initiative officially commenced operations and transactions on October 1, 2024.
The policy was designed to ease foreign exchange pressures on the US dollar, reduce transaction costs, and stabilise domestic pump prices for petroleum products.