The Ghana National Petroleum Authority (NPA) has made a recent announcement on fuel subsidies in the country. This is in stark contrast to its neighboring country, Nigeria, which is still spending heavily on fuel subsidies. The removal of the subsidy is part of the country’s regulatory measures to ensure stability in the downstream sector.
Abdul Hamid, the Chief Executive Officer of NPA, made this statement during a presentation at the ongoing Africa Refiners and Distributers week 2023, held in Cape Town, South Africa. Hamid stated that the Ghanaian government, through the NPA, has also removed energy subsidies. He noted that the government had to remove subsidies to prevent the shutdown of industries due to a lack of funds to provide subsidies.
Hamid emphasized that the industries are now being powered by investments in the private sector, and there are no complaints of supply. The NPA is ensuring affordability and security for vulnerable consumers through the removal of energy subsidies, he added. Furthermore, he mentioned other reforms implemented by the NPA, including the installation of fuel caps for the first time in 30 years to control market instability.
Hamid also stated that the NPA has created a special fund to assist refineries in boosting their capacity to 50 barrels of oil to meet the country’s growing demand. These measures were implemented in response to the global oil and gas market volatility caused by the Russian-Ukraine war and energy transition-related policies.
It is commendable that the Ghanaian government is taking proactive steps to ensure stability in its downstream sector, despite the difficult economic climate. It remains to be seen whether other African countries will follow suit in removing fuel subsidies to promote a sustainable energy industry.