Former Director of the Institute of Statistical, Social and Economic Research, Peter Quartey, is calling on the government to prioritise building strategic fuel reserves to protect the country from shocks in the global oil market.
According to him, Ghana must strengthen its economic buffers to better manage external shocks, particularly those linked to global oil price volatility triggered by geopolitical tensions in the Middle East.
Speaking to Citi Business News on the sidelines of a public lecture marking the 70th anniversary celebration of Wesley Grammar School, Professor Quartey noted that global events can quickly affect domestic fuel prices, making it important for Ghana to prepare in advance.
He explained that the country must take advantage of relatively stable oil prices to build reserves that can help cushion the economy when prices spike.
“We have seen oil prices initially go up, but they are coming down. We have to study it carefully. But then it tells you that we need to build buffers. BOST was established to have these strategic reserves as buffers in case some of these things happen,” he said.
Professor Quartey pointed out that although the Bulk Oil Storage and Transportation Company (BOST) was created to maintain strategic petroleum reserves, Ghana has not fully utilised the system to protect the country against supply disruptions and price shocks.
“Unfortunately, we have not been able to do that. This is a wake-up call to start gradually building up buffers. Should this happen, we will be able to cushion ourselves,” he added.
He also suggested that if global oil prices rise significantly, the government could consider reviewing some of the taxes imposed on petroleum products to ease the burden on consumers.
“Also for consumers, some of the taxes we have to look at. The tax on petroleum. If oil prices go up so high, we may want to look at the taxes and remove some in order to cushion the poor,” he stated.
His comments come at a time of growing concern about the impact of escalating tensions in the Middle East on global crude oil supply and pricing.
Industry analysts have already projected that fuel prices in Ghana could increase in the second pricing window of March if the upward pressure on global oil prices persists.
