COPEC advocates for cedi payments for crude oil at local refineries

The Chamber of Petroleum Consumers (COPEC) is calling for a policy shift to allow local refineries in Ghana to purchase crude oil using the Ghana Cedi instead of the United States Dollar. Executive Secretary Duncan Amoah argues that this transition is necessary to alleviate the persistent pressure on the foreign exchange market and to provide a measure of stability for the local currency. By transacting in the national currency, COPEC believes the energy sector can become more resilient against the volatility of international market pricing.

According to COPEC, the current requirement for refineries to pay for crude oil in dollars creates a logistical and financial mismatch. Refineries typically sell their finished petroleum products on the domestic market in cedis, but the need to acquire dollars for their primary feedstock forces them to compete with other sectors for limited foreign exchange reserves. Duncan Amoah emphasized that this competition not only weakens the cedi but also creates unnecessary operational hurdles for local refiners, which can ultimately lead to higher prices at the pumps for Ghanaian consumers.

This proposal comes at a time when there is a renewed national focus on enhancing domestic refining capabilities to reduce the country’s heavy reliance on imported fuel. COPEC maintains that aligning the currency of purchase with the currency of sale would provide a natural hedge for refineries. It would also safeguard the domestic economy from the immediate shocks of international currency fluctuations, which have historically been a significant driver of inflation in the transport and energy sectors.

The advocacy by COPEC suggests that such a move would be a critical step toward achieving energy security and economic sovereignty. By decoupling local production from constant dollar demand, the government could potentially see a more stable exchange rate environment. Moving forward, the chamber expects policymakers and the central bank to consider the feasibility of this arrangement as part of broader efforts to strengthen the local refining industry and protect the purchasing power of the average Ghanaian.