1. Introduction

The Bulk Oil Storage and Transportation, now BOST Energies, was primarily established to manage strategic petroleum stocks for the Country.

This mandate requires the state wholly owned energy company to have petroleum reserves that could sustain the country in times of energy distress due to exogenous factors such as geopolitics,pandemics, natural disasters, oil price fluctuations as well as energy supply chain disruptions.

All these factors are beyond the control of the Country but a Strategic Petroleum Fund provides a buffer against such occurrences.

The proposed levy will provide the needed infrastructure to support the purchase and storage of petroleum products against unforeseen circumstances.

A downstream institutional collaboration could be further enhanced between the now revived Tema Oil Refinery(TOR) and BOST Energies.

This collaboration would ensure that a portion of the petroleum stocks levy be earmarked for the purchase of crude to be refined by Tema Oil Refinery (TOR) and stored on behalf of BOST Energies.This will augment the storage and distribution arrangements that already exist at BOST Energies.


2.Comparative Analysis

Countries around the world have strategic stocks in petroleum in order to sustain their economies against shocks.

The US Department of Energy announced a strategic petroleum reserve capacity of about 714 million barrels with an inventory of 395 million barrels.

This could sustain the petroleum needs of the country for 90days in times of an emergency.This is managed by the Department of Energy through the Office of Petroleum Reserves.

China,the leading importer of petroleum products has significantly invested in securing strategic petroleum stocks in preparedness against supply disruptions .

The Chinese government has both commercial reserves and strategic government controlled petroleum reserves.The US. Energy Information Administration(EIA) estimated China’s combined Strategic Oil Reserves at 1.4 billion barrels.This can sustain their petroleum demands for 4-6months in the event of any supply disruptions.

This aggressive stockpiling was influenced largely by geopolitics and the attendant sanctions imposed on Russia.

The Chinese have recognized the uncertainties within the energy supply chain and the need to prepare adequately for any future shortfall.

According to the Eurostat,Germany has an estimated strategic stock reserves of 170million barrels as at December 2025.

These include both crude oil and refined petroleum products.This is managed by the Petroleum Stockpiling Association and meets the requirements of the International Energy Agency (IEA).

The reserves support a 90day guaranteed buffer as benchmarked by the IEA.

Germany equally embarks on an aggressive energy transition with massive electric vehicle penetration and rapid solar panel installations,with these, the country prepares adequately towards any potential petroleum supply disruptions.


3.What Pertains in Some African Countries

The situation with South Africa clearly departs from the internationally accepted benchmark of a 60-90day of a petroleum buffer to protect consumers against shortages and shocks within the petroleum supply chain.

The Country’s Central Energy Fund manages the reserves on behalf of the South African government.They have 7.7million barrels of crude oil in reserve at the end of 2025.This unfortunately can only sustain the South African petroleum demand for 2weeks after a major disruption.

In the case of Nigeria,despite its oil wealth,the country frequently experiences fuel shortages and long queues for petroleum products.The country now aims at forging collaboration with private refineries like that of Dangote in order to guarantee petroleum products availability.The 650,000 barrel-per-day refinery is expected to augment the state’s capacity to improve upon Nigeria’s petroleum supply.The country has a petroleum reserve that can only sustain fuel demands for a period of 30days when there’s a disruption.

Ghana’s situation is no different from both South Africa and Nigeria.


The West African country does not have strategic petroleum stocks that can be relied upon in times of sudden shortages or supply disruptions.This puts the country in a very unstable energy position whenever there is a major shortfall in supply.

There was a dedicated fund for replenishing the strategic stocks until it was removed in 2006.The Country now relies solely on operational stocks without the necessary buffer of a strategic reserve.

4.The Need For A Stragtegic Stocks Levy:

There is the urgent need for a reintroduction of the strategic stocks levy in order to achieve the following objectives for the downstream petroleum industry and the sustainability of the entire energy environment:

4.1 To sustain the country against external shocks.The over reliance on operational stocks as against strategic reserves exposes the Country to external supply disruptions in times of an emergency.The inventory at BOST Energies cannot sustain the country beyond 6weeks and this threatens energy security.

4.2 A Strategic petroleum levy will provide the resources to establish the required storage facilities,transportation infrastructure and the expected monitoring mechanisms to ensure adequate supply and monitoring in times of disruptions.Some of the existing infrastructure requires major maintenance to enable operational efficiency and optimal capacity for storage and supply.

4.3 A dedicated levy for strategic stocks will afford the country the needed buffer to maintain prices of petroleum products within a specified range when prices surge on the international market.

The strategic stocks at such crucial moments will be released to augment operational stocks to ensure that supply meets local demand.This will cushion petroleum consumers against unexpected price hikes at the pumps.

4.4 It aligns Ghana to International Energy Agency’s (IEA) benchmark.Although Ghana is not a member of this Agency,their standard guides energy security and attracts investment into the sector.A 90day strategic reserve will contribute significantly to the energy needs of the country as well as to the overall economic benefit of its citizens.This strategic plan will equally attract energy investment into the country.

5.Conclusion:

In conclusion,countries that invested in strategic reserves do so through a national fund,specific budgetary allocation or a levy on petroleum products. These sources of funding provide the needed liquidity to purchase,store and supply petroleum products in times of supply disruptions.

Ghana should reintroduce the strategic stock levy particularly at a time where there are geopolitical tensions which has the potential to create uncertainties within the international market in the future.This levy will provide the foundation for our long term energy security and stability.

Failure to prepare against these exogenous factors will expose our energy vulnerabilities whenever there is an abrupt supply disruption.The medium to long term benefits of a strategic stock levy far outweighs the expected immediate commitment

Author:Prince Lumor,Energy and Policy Analyst-Institute For Energy Security.(IES)