….African Fuel Refiners tell leaders
The African Refiners and Distributors Association (ARDA), has called on African nations to reduce their reliance on the U.S. dollar for petroleum transactions and work toward establishing a regional currency.
This move, they argue, would mitigate the economic challenges tied to dollarization and enhance energy independence across the continent.
Speaking at the African Energy Week in Cape Town, South Africa, ARDA President, Dr Mustapha Abdul-Hamid, emphasized the need for Africa to end crude oil exports and prioritize refining domestically, especially given the continent’s rapidly growing population.
He stressed that Africa’s dependence on foreign currencies for energy imports destabilizes economies, increases import costs, and hampers energy security.
Dr Abdul-Hamid, who is also the Chief Executive of Ghana’s National Petroleum Authority (NPA), advocated for a three-pillar approach to African energy sovereignty: policy harmonization, integrated infrastructure, and the establishment of a regional currency.
“Nobody puts crude oil in their vehicle or airplane; everything that generates movement and wealth is a refined product,” he said, underscoring the importance of closer cooperation between Africa’s upstream and downstream sectors to maximize the continent’s natural resources.
He also highlighted the critical need for fuel specification harmonization, citing the disparity in sulfur levels across African countries as a barrier to regional trade.
For instance, Ghana has a sulfur limit of 50 parts per million (ppm), whereas some West African nations allow up to 3,000 ppm. “Without a harmonized specification across Africa, trade within the continent remains difficult, restricting our ability to collaborate effectively,” he explained.
To further support domestic production, Dr. Abdul-Hamid praised Ghana’s policy mandating the use of locally refined fuel for oil extraction machinery, saying it bolsters refinery output and reduces reliance on imports.
“Currently, oil marketers in Ghana need $400 million monthly to import refined petroleum products. Establishing a shared currency within regions like West Africa could help alleviate such pressures and stabilize our economies,” he suggested.
Omar Farouk Ibrahim, Secretary-General of the African Petroleum Producers Organisation (APPO), echoed these sentiments, urging the development of robust infrastructure to reduce dependence on foreign markets.
“We have vast resources on our continent, yet we often depend on imports for energy. Partnering with neighboring countries to build the necessary infrastructure can secure our energy needs,” Ibrahim stated, stressing that intra-continental infrastructure is key to achieving energy security.
Riverson Oppong, CEO of the Association of Oil and Gas Marketing Companies, further emphasized the paradox of Africa’s resource exports. He pointed out that while Africa produces substantial crude oil, it continues to rely on imports for refined products.
“Nearly 90 percent of our crude production is exported, leaving us dependent on re-imported, high-cost refined products,” Oppong noted, calling this cycle a threat to economic stability and energy security.
During a recent visit to Morocco, Oppong, observed an idle refinery with a capacity of 550,000 barrels per day, illustrating the continent’s unused potential.
“Why are we sending our crude oil to Europe for refining only to bring it back at a premium? This weakens our refineries and increases costs,” he said, calling on African nations to support domestic refining to promote energy self-sufficiency.
