The Institute for Energy Security (IES) has warned that Ghana could face the same crude supply challenges experienced by Nigeria if its Domestic Market Obligation (DMO) is enforced without guaranteeing adequate volumes for local refineries.
The IES, in a policy research paper, said Nigeria’s experience demonstrates that having a legal domestic crude supply obligation is not enough if refineries cannot secure sufficient feedstock to operate at the required capacity.
The paper cited the experience of the Dangote Petroleum Refinery, which requires an estimated 13 to 15 crude cargoes a month for efficient operations. By May 2026, however, the refinery had received allocations of only about seven cargoes, forcing it to source the remainder from international markets at prices denominated in US dollars.
According to the IES, the situation created a currency mismatch because the refinery was sourcing some of its crude in dollars while being expected to sell refined products domestically in naira under Nigeria’s naira-for-crude arrangement.
The institute said the experience ultimately weakened the currency-stability objective of the policy, with the refinery shifting its domestic pricing to dollar terms.
IES believes Ghana must avoid a similar outcome as it seeks to use its DMO framework to support the Tema Oil Refinery (TOR) and reduce dependence on imported petroleum products.
The paper noted that TOR has resumed refining operations following the completion of its turnaround maintenance and is currently operating at about 28,000 barrels per stream day. Its nameplate capacity is 45,000 barrels per stream day, with plans for further expansion towards 100,000 barrels per day.
The institute therefore argues that any crude allocation to TOR must be based on the refinery’s actual throughput requirements and adjusted as its capacity expands.
It cautioned that providing insufficient crude volumes could leave TOR dependent on international markets for additional feedstock, undermining the expected benefits of restoring the refinery.
“Volume adequacy” is identified by the IES as one of the key risks in implementing Ghana’s DMO. It says allocations must be calibrated to TOR’s current and future throughput requirements to avoid the under-supply pattern observed in Nigeria.
The institute also says Ghana must address currency and payment security if it decides to pursue cedi-denominated settlement for DMO crude.
It recommends that exchange-rate adjustment or indexation provisions be established in advance to prevent the currency mismatch that undermined Nigeria’s naira-for-crude arrangement.
IES argues that Ghana can draw a different lesson from Indonesia, where domestic crude supply obligations were embedded in production-sharing contracts, providing greater certainty over access to feedstock.
The institute is consequently calling for Ghana to enforce its existing DMO regulations on a predictable, calendar-year basis rather than relying on ad hoc crude allocations.
It says the objective should be to provide domestic refineries with sufficient and predictable crude volumes while ensuring that the policy does not create new foreign-exchange pressures.
