Vice President Dr Mahamudu Bawumia has announced plans by the government to make Ghana a hub for refined petroleum products for the West Africa sub-region and the continent.
"Petroleum Hub is one of government's strategic anchor initiatives that would serve as a new pillar of growth in the Ghanaian economy," the Vice President said when he addressed the Ghana International Petroleum Conference (GhIPCon) in Accra yesterday.
The conference created the platform for stakeholders in the petroleum industry to discuss, among other issues, Ghana's Petroleum Downstream policies and industry trends.
Vice President Bawumia indicated that the establishment of a petroleum hub would accelerate the growth of the country's petroleum downstream sub-sector and make it a major player in the economy and consequently ensure development of sustainable value, wealth creation and the progress of industry.
"The Petroleum Hub project will increase the presence of major international oil trading and storage companies, create regional trading champions and encourage joint ventures between local and international companies for knowledge transfer and wealth creation. It will provide value addition in our petroleum industry."
"The development of a hub in Ghana will require an increase in the country's refining capacity beyond current levels, both to meet domestic demand and for export," he said and urged the enterprises in the industry to change their business model to respond to the hub plans, as there would be more products for export than their current model of importing the shortfalls in production.
Dr Bawumia said the development of a Petroleum Hub for refined petroleum products was one of the important growth pillars the government had envisaged for the country's economy.
He touched on deregulation in the petroleum industry which began prior to the discovery of oil in commercial quantities in 2007, and indicated that after nearly a decade and a half of deregulating the industry, it was important for the stakeholders to take stock of how far they had come.
"The stock taking should include a comprehensive review of the Deregulation Policy and its implementation to determine if the intended objectives have been achieved."
"The review should also focus on the petroleum products pricing formula. This is needed to ensure that areas of the formula that have not yet been deregulated, such as the transportation infrastructure of petroleum products in all its forms, can be reviewed and deregulated to enhance competitiveness and market efficiency. This I believe can lead to a reduction in prices of petroleum products," the Vice President said.
Dr Bawumia urged the Petroleum Service Providers (PSPs) especially the Bulk Distribution Companies (BDCs) to develop their capacity to compete favourably with multinational companies and become multinationals within the sub region.
"I encourage the BDCs to consider consolidating their businesses instead of going solo and be able to list on the Ghana Stock Exchange to raise the needed capital to expand their businesses as well as venture into other markets."
"Mergers should not be seen as a step to loss of ownership, but rather as a strategy to enhance growth and competitiveness in the long run. Take a cue from the breweries and the telecoms," he said.