An Assessment of the Potential Benefits of Refining Crude Oil in Ghana

Refining is vital in the oil and gas industry, converting crude oil into products like gasoline, diesel, and LPG. Since discovering oil in 2007, Ghana’s petroleum sector has experienced significant growth; however, the country still relies on imports to meet its domestic demand, importing nearly four million metric tonnes of petroleum products in 2022, with gas oil (diesel) being the most significant component. This study, therefore, explored the potential benefits of refining Ghana’s crude oil, with a focus on its economic feasibility and the implications thereof. Considering the construction of a new refinery, a cost-benefit analysis was conducted using the Jubilee field crude oil, evaluating Net Present Value (NPV), Return on Investment (ROI), and Payback Period with the aid of Aspen HYSYS and an Excel Spreadsheet. The cost-benefit analysis indicated a positive NPV, a payback period of 3.5 years and an ROI of 29%. The predicted cost savings for local refining, with 2022 as a case, were estimated to be $1.4 billion (GH₵16.3 billion). By refining petroleum locally, an estimated net gain of $8.66 (GHS 96.99) per barrel was computed. A 2013 – 2033 forecast analysis projected increasing consumption volumes, rising import costs, and escalating ex-pump prices, further supporting the need for enhanced local refining capacity. The Government of Ghana should therefore prioritize refining crude oil locally as part of its industrialization strategy. This will help create jobs, generate foreign exchange savings, and enhance energy security.