<<Print>>

A former Chief Executive Officer of the Ghana National Petroleum Corporation (GNPC), Mr Alex Mould has explained how crude oil and gas supply has become the main missile in the hands of Russian President Vladimir Putin in the warfare with Ukraine as well as with most European countries and the United States of America (USA).

Mr Mould said on the Key Points with Dzifa Bampoh on TV3/3FM Saturday February 26 that Mr Putin knows that Europe is vulnerable when it comes to the reliance on gas by most European countries for economic activities especially during the peak of the winter.

“The spike we saw where oil went above a hundred dollars for the first time since 2014 was just a response by circulators and traders who thought that this was going to cause supply and demand problems.

“But there is excess supply in the world, Russia produces 12million barrels of oil a day, so does Saudi Arabia, they have the capacity to do that so does the USA. The USA consumes the most oil more than any country and Russia has about 4.8billion barrels a day of oil they export. Saudi Arabia and OPEC have excess capacity of almost 5 billion barrels (4.8bn barrels) of which Saudi Arabia controls half of that, 2.3 billion barrels.

“So, the consensus by researchers and traders whom I have spoken to in the last week was yes, they were a little concerned about the immediate impact where you will see spike because there are issues to do with Russia not supplying gas to Europe.

“But the fact of the matter is, Europe needs the gas and Europe and US say they are not putting sanctions on gas and oil in the short term. However, as we speak Europe is now receiving gas from other Asian suppliers just to ensure that Putin will not hold them, given that we are at the peak of winter.

“This is where it will be felt in Europe, most people cannot switch from gas to crude oil to power their power plants, it is only Germany that has the capacity to do that. So Europe is very vulnerable as we we speak and Putin knows that, the USA also knows that and the USA recently, the Biden administration said they will not sanction Russia crude because that will harm US consumers,” he said.

In a related development, Member of Parliament for Yapei-Kusawgu, John Jinapor, has asked Ghanaians not to expect reduction in fuel prices any time soon due to the ongoing geopolitical tension between Russia and Ukraine.

He has asked the Government of Ghana to use the profits made from crude oil sales to cushion Ghanaians during this difficult moment.

The former Deputy Minister of Energy told TV3’s Alfred Ocansey on the Business Focus progemmme that the government has made quite substantial profit from the sale of crude oil.

He said “Based on what is even happening today, because of the geopolitical tension between Russia, the West vis-à-vis Ukraine, you should expect that crude oil prices will not be coming down anytime soon.

“And so, what is Ghana doing? First of all, we are making a huge windfall. If you look at 61 to 100, that represents a 60 per cent jump, in terms of the revenues that we are expecting and so clearly, we are making some very huge windfall which we can use to cushion the ordinary Ghanaian.

“The other issue is that if you look at taxes on petroleum products the taxes are so huge, not just the number of taxes but the rate at which they have increased them.

“In 2021 we introduced what we call the energy sector recovery levy , policing levy, increased and so all those increments culminated in petroleum prices increment of about 13.6per cent instantly. So far the BOST margin has gone up about 200 per cent fuel margin has gone up about 200 per cent , it is just a plethora of taxes.”

Oil prices went up on Thursday, with Brent rising above $105 a barrel for the first time since 2014 after Russia’s attack on Ukraine exacerbated concerns about disruptions to global energy supply, the Economic Times reported.

“Oil prices are soaring with no end in sight as the news of Russia’s full-scale military incursion of Ukraine, immediately putting at risk up to 1 million bpd (barrels per day) of Russian crude oil exports transitioning through Ukraine and the Black Sea,” said Louise Dickson, senior oil market analyst at Rystad Energy.