Guyana is once again considering how a refinery, expanded fuel storage and a possible national oil company could fit into a broader long-term strategy to strengthen energy security, as the country remains dependent on imported refined petroleum products despite its growing crude oil production.
President Irfaan Ali outlined the thinking during a press conference on August 18, while discussing the impact of global disruptions and imported inflation on Guyana. The ideas were presented hypothetically as part of the government’s policy considerations. There was no announcement that a refinery or national oil company has been approved or is moving into development.
“We produce crude oil, but we import all refined oil. So we import back all the price differentials… That is why I believe that we have to have a refinery. We cannot have crude oil and not have security of supply,” Ali said.
He elaborated, stating that “security brings with it stability and then gives us some shield against shocks that are currently existing”.
The Head of State also placed the refinery concept within a larger energy system that could include a national oil company. He described the potential entity as one that could look across the country’s fuel supply chain rather than necessarily invest directly in a refinery.
“The refinery can be linked to what a national oil company can look like. Not as an investor, but, you know, one company that looks holistically at the entire ecosystem in terms of the supply.
There is also the issue of how we increase our security in terms of storage. Whether you have 30-day storage, 90-day storage, 120-day storage, because that is a major problem,” Ali explained.
The disruption in the Strait of Hormuz has exposed vulnerabilities in Guyana’s fuel supply chain. In April, several stations in Georgetown experienced supply constraints, while the government moved to reassure the public that additional shipments of gasoline, diesel and aviation fuel were on the way.
Several days before the gas station shortage, the government reported a 38.5% increase in gasoline import costs in the four weeks leading up to the middle of March.
