2020/21 CBOD Ghana Petroleum Indusrty Report

The 2020/21 Ghana Petroleum Industry Report is an amalgamation of the 2020 and 2021 Industry reports. The Report extensively reviews Ghana’s upstream and downstream petroleum sectors spanning policy, finance, infrastructure, and market activities in 2020 and 2021 The Report also highlights key developments and risks faced by the industry and provides recommendations for consideration by stakeholders.

The in-depth analysis of this report intends to provide insight and relevant information to industry players, policymakers, academics, and business leaders to be able to make informed business, investment, and policy decisions. The Report has been segmented into eight chapters; the first four chapters review developments in the upstream whiles the remaining four chapters review developments in the downstream sector.

The outbreak of Covid-19 during the period under review had a severe impact particularly on the upstream petroleum sector globally. Due to the restrictions implemented to contain the spread of the Virus, industrial activities slumped, resulting in the oil market’s collapse. Hence, the period saw Brent Crude falling from an average of $63 5 per barrel in January 2020 to $32 per barrel in March and further to a record low of
$18 38 per barrel in April 2020. Due to the unprecedented fall in crude prices in 2020, the government-projected receipt of $7615 million in 2020 was revised down to $285 8 million, leading to a revenue shortfall of $475 7 million. However, the recovery from the pandemic outbreak resulted in relatively favourable international prices in 2021 Therefore, total receipts from petroleum production increased from $666 39 million in 2020 to $783 33 million in 2021, although production in 2020 was higher than that of 2021

Some key developments in the downstream sector in 2020 and 2021 were the establishment of the Petroleum Hub Development Corporation and the commencement of the development of the National Energy Transition Policy The government of Ghana proceeded with its commitment to turn Ghana into Africa’s first petroleum hub with the enactment of the Petroleum Hub Development Corporation ACT1053, to promote and develop a Petroleum and Petrochemicals Hub. The Hub is to be located on a 20,000-acre parcel of land, along the coastline of the Jomoro District of the Western region. The Petroleum Hub has been structured to be developed in 3 phases, with specific projects earmarked for construction under each phase

For the period under review, the National Energy Transition Committee was commissioned to develop a national energy transition policy to evaluate the current energy sector, set national objectives and targets for the energy transition, and prescribe policies and measures for achieving these targets as well as assess the benefits, risks, and costs of the global energy transition.

Also, the Cylinder Recirculation Model (CRM), which is part of the National LPG Promotion Policy to ensure that 500/o of Ghanaians have access to safe, clean, and environmentally friendly LPG for domestic, commercial, and industrial usage by 2030, was piloted in five regions across the country. An impact assessment carried out in two of the pilot regions to ascertain the impact of the pilot CRM revealed that the inadequate and untimely supply of branded cylinders affected the smooth running of the pilot program However, some stakeholders believe that introducing new players in the supply chain will lead to a rise in the pre-tax cost of bottled gas and may require the Government to favorably consider proposals for the downward revision of taxes to compensate for anyrise in pre-tax prices.

As of the end of 2021, the total number of BIDECs stood at forty-one (41), compared with thirty-six
(36) in 2020, with the top ten (10) importing 750/o of the total petroleum products imported in 2021 An analysis of BIDECs’ sales volume performance for 2021 also revealed that the top ten (10) BIDECs supplied 72% of petroleum products to the market Notwithstanding, the BIDEC market has witnessed an increase in competition since 2013. The Herfindahl­ Hirschman Index (HHI) showed a declining trend between 2013 and 2021, suggesting that the market is less concentrated, even though not highly competitive.

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