By Surv. Prof. Forster SARPONG
The aspiration to restructure the Tema Oil Refinery aligns with rising geopolitical tensions particularly the Israel-Iran conflict which have disrupted global oil supply chains, driving up fuel prices and exposing Ghana’s heavy reliance on imported refined products, thereby underscoring the urgency for domestic refining capacity to safeguard national energy security and stabilize consumption costs.
In October 2025, Ghana stands on the brink of an economic and industrial reawakening as the Tema Oil Refinery (TOR) prepares to resume full operations after a prolonged four-year shutdown.
The announcement by Mr. Edmund Kombat, the Acting Managing Director of TOR, during a briefing to the Energy Committee of Parliament, has rekindled national discourse about Ghana’s ability to control and benefit from its energy value chain.
This is more than just the restarting of machines it is the symbolic rebirth of industrial self-sufficiency, a strategic act to reduce Ghana’s dependency on foreign refineries, and a policy pivot toward restoring macroeconomic resilience.
The dormant state of TOR since 2021 has cost Ghana dearly. With refinery operations at a standstill, the country has spent approximately $4.8 billion annually on importing refined petroleum products amounting to over 23% of Ghana’s total import bill according to the Bank of Ghana’s May 2024 Summary of Economic and Financial Data.
The implications for foreign exchange outflows, trade imbalances, and inflation have been severe. Yet, with global oil prices hovering between $80–$90 per barrel in 2024 and further volatility expected due to geopolitical tensions and supply disruptions, reviving domestic refining has become not just a fiscal strategy but a national necessity.
The Road from Ruin: TOR’s Collapse and Its National Consequences
TOR, once a shining emblem of Ghana’s post-independence industrial ambition, was rendered non-operational in 2021 due to a combination of legacy debts exceeding $400 million, frequent equipment breakdowns, managerial inefficiencies, and chronic political interference.
In the absence of domestic refining capacity, Ghana was forced to export its crude primarily extracted from the Jubilee, TEN, and Sankofa-Gye Nyame fields while simultaneously importing finished petroleum products at inflated global prices.
The financial burden has been staggering. The monthly import bill for petroleum products now averages $400 million, placing immense pressure on Ghana’s foreign reserves.
In 2023, petroleum imports alone contributed significantly to Ghana’s current account deficit, weakening the cedi and aggravating inflationary pressures. In fact, Ghana’s inflation rate surged to 54.1% in December 2022 before gradually retreating to 24.2% by April 2025, thanks in part to fiscal tightening under the $3 billion IMF Extended Credit Facility secured in May 2023.
Unlocking National Value: Economic and Strategic Gains from Domestic Refining
The Return of TOR as a Catalyst for Economic Transformation
The restart of TOR offers Ghana the opportunity to reclaim control over its energy supply chain and generate substantial economic dividends.
According to Mr. Kombat, the refinery aims to process up to 60% of Ghana’s total crude needs equivalent to around 102,000 barrels per day based on the nation’s current daily output of 170,000 barrels. This capacity will translate into multiple high-impact outcomes:
Foreign Exchange Savings
If TOR achieves even 60% refining capacity domestically, Ghana could reduce its refined petroleum imports by at least $2.5 billion annually.
This would ease pressure on the Bank of Ghana’s forex reserves, strengthen the cedi, and reduce Ghana’s exposure to international supply shocks.
Boost to Balance of Payments
The persistent trade deficit worsened by petroleum imports—could shrink, helping stabilize the current account. In 2023, Ghana’s current account deficit stood at 2.6% of GDP; this could improve significantly if TOR meets domestic fuel demands.
Job Creation across the Value Chain
TOR’s full operation is expected to create over 2,000 direct jobs and more than 5,000 indirect jobs across logistics, supply chain, distribution, engineering, and ancillary services.
It will also provide new career paths for graduates in chemical engineering, instrumentation, energy management, and petroleum economics.
Support to Local Industry and Manufacturing
By ensuring cheaper and more stable fuel supply, domestic refining will reduce operating costs for energy-intensive industries such as cement, steel, and agro-processing.
This aligns with the government’s industrialisation agenda under the Ghana Integrated Aluminium Industry (GIADEC) and One District One Factory (1D1F) initiatives.
Stimulating the Downstream Sector
Bulk Distribution Companies (BDCs), Oil Marketing Companies (OMCs), and the National Petroleum Authority (NPA) will benefit from improved product availability, lower transport and demurrage costs, and more predictable pricing.
TOR in Context: Regional Lessons and Competitive Pressures
Ghana is not alone in this strategic shift. Nigeria, Africa’s largest oil producer, launched the $19 billion Dangote Refinery in 2023 with a capacity of 650,000 barrels per day.
This private-led refinery has drastically reduced Nigeria’s dependency on imports and is now positioned to export refined products across West Africa. Ghana must take note not merely to compete, but to collaborate, innovate, and ensure TOR becomes efficient, modernised, and globally competitive.
Adopting a Public-Private Partnership (PPP) model could help TOR overcome funding and operational constraints. A performance-based contract model linked to profitability and uptime can reduce bureaucratic inertia while introducing best practices in procurement, safety, and financial control.
Governance, Transparency and Institutional Reforms: A Non-Negotiable Foundation
To avoid repeating the errors of the past, TOR’s revival must be underpinned by a new governance ethos:
- Financial Restructuring:
Government must work with the Ministry of Finance and Ghana Infrastructure Investment Fund (GIIF) to clear TOR’s legacy debts and ring-fence new revenues for reinvestment.
- Institutional Oversight:
TOR should be subject to annual performance audits by the Auditor-General and reporting to the Public Accounts Committee (PAC).
- Civil Society Participation:
Transparency can be enhanced through civil society monitoring of procurement processes and contract disclosures.
- Strategic Investment Board:
Establish a multi-stakeholder advisory board including industry experts, financiers, and international partners to guide TOR’s long-term vision.
A Refinery, A Nation, A New Chapter
The reopening of Tema Oil Refinery in October 2025 is more than a technical or industrial milestone it is a sovereign statement. It reflects Ghana’s renewed commitment to manage its natural resources judiciously, create sustainable jobs, reduce dependence on volatile global markets, and drive real sector growth from within.
If managed with integrity, innovation, and strategic foresight, TOR’s resurrection could become a cornerstone of Ghana’s post-debt-restructuring economic transformation. It could mark the beginning of a new energy economy—rooted in local value addition, industrial resilience, and macroeconomic sovereignty.
As the flames in TOR’s furnace are reignited, so too should the nation’s resolve to build a refinery not just of crude but of national dignity and sustainable prosperity.
