Chief Executive of the National Petroleum Authority (NPA) Dr. Mustapha Abdul-Hamid disclosed that Ghana’s petroleum downstream industry has an annual sales value of about GH¢32.94 billion and contributes 7.2% of the country’s GDP.
This, he said, represents a 41% increase in demand for fossil fuels as compared to 2020, which is an unprecedented surge in consumption of fossil fuels when the annual average over the years had been between 5% and 7%.
Delivering a welcome address at the 2022 Ghana International Petroleum Conference (GhIPCon) on Wednesday, September 28, 2022, Mr. Abdul-Hamid stated the petroleum downstream sector is, however, entering a new era as the world looks to accelerate its transition away from fossil fuels and thus putting pressure on the government.
According to him, much of the world is exposed to the global energy transition as countries continue to depend on oil and gas revenues.
The 2022 GhIPCon is under the theme ‘Energy Transition in the African Petroleum Downstream Context: Prospects, Challenges and the Way Forward.”
He stated that Energy Transition is the pathway toward transformation of the global energy sector from fossil-based fuel to zero carbon and every country on earth is obliged, under the Paris Agreement, to reach this net zero emissions in the second half of this century.
He noted that the reality of fulfilling this energy transition commitment is, however, putting pressure on government spending to ensure the diversification process meets global needs.
“It is therefore imperative that we intensify our efforts. But it is not just about the pace of change. It is also about the scale of change.”
“Every country, every sector, and every company has announced its ambition to be a Net Zero Emissions energy company or society by 2050 or sooner.”
Mr. Hamid indicated that the NPA is committed to reducing the emissions from the energy products consumed in Ghana, which has culminated to the reduction of sulphur content in transport and industrial fuels from a maximum of 5000ppm to a maximum of 50ppm.
Ghana, he said, is one of the few African countries that consume low Sulphur fuels, with a roadmap for local refineries to comply.
He reiterated the government’s determination to make the Cylinder Recirculation Model policy a reality and indicated in the entire sub-region, it is only Ghana and Nigeria that still operate LPG filling stations and ought to move with the time and to achieve LPG penetration of 50% by 2030.
He stated that government regulations play a vital role in accelerating the energy transition and stressed that regulations and incentives lead to greater innovation that in turn allows companies to commercialise more rapidly their low and zero-carbon solutions.
He noted that the demand for transportation fuels will wane over the long term or decline rapidly depending on policy and technology innovation.
Downstream investment and operating strategies, he said, must therefore account for the fundamental shift in regulations and demand trends.