[ 2014-08-16 ]

25 Trucks of premix fuel head for coastal regions following release by TOR
The Tema Oil Refinery (TOR) yesterday released
2,300 tonnes of premix fuel to help avert a
shortage of the product, which powers the engines
of outboard motors of canoe fishermen.

When the Daily Graphic visited the TOR yesterday
afternoon, 25 trucks had been loaded with premix
fuel at the loading gantry. Other trucks had also
queued, waiting to be served.

The loaded trucks have since departed to the
various coastal regions and Afram Plains to be
suppled to fishermen.

In all, 2,300 tonnes would be released, and that
is expected to meet a week's demand.

As a result of the refusal of commercial banks to
raise Letters of Credit (LCs) to pre-finance the
importation of premix fuel because of debts owed
them, there was the fear of a shortage of the
product.

The Bulk Oil Distribution Company (BDC) is
indebted to the banks, while the government is
also indebted to the company. This makes it
impossible for the company to raise funds to
import the product to meet demand.

According to a Deputy Minister of Energy in charge
of Petroleum, Mr Benjamin S.K. Dagadu, money would
be released next week to the BDC.

Financial Hold
Explaining further, Mr Dagadu said there was
enough premix fuel available in storage tanks, but
the importer was unable to release them onto the
market because the banks had put a financial hold
on the product.

Following the development, the company could
supply premix fuel up to this weekend.

To avert any shortage, the TOR agreed to release
2,300 tonnes of premix fuel from its storage tanks
to meet a week's demand for the product.

'There will be a meeting on Monday to finalise
agreement on the amount of money to be released to
the company that supplies premix fuel,' Mr Dagadu
told the Daily Graphic in interview in Accra
yesterday.

He gave an assurance that the supply of premix
fuel would not be interrupted in anyway.

Premix fuel is highly subsidised, resulting in the
accumulation of a huge debt by the government,
which has declined to pass on the debt to the
consumer.

An industry source has stated that the company
responsible for lifting premix fuel would need
GH¢40 million to shore itself up to lift the
product, but the government has indicated that it
can only part with GH¢10 million.

Government debt
The government owes the BDC, GH¢1.3 billion,
being losses incurred due to the depreciation of
the cedi against the dollar.

The product is usually purchased in dollars and
consumers would have borne the cost of the price
differentials if the government had not decided to
absorb them.

Following the long queues for fuel across the
country recently, as a result of fuel shortage,
the government, on June 27, 2014, released GH¢450
million to settle part of its debt, and engaged
the international audit firm, Ernst and Young, to
audit the claims submitted by the BDCs.

Audit hangs
Meanwhile, some of the banks that pre-finance oil
imports are not co-operating with the audit firm,
said the Chief Executive Officer of the Ghana
Chamber of Bulk Oil Distributors (CBOD), Mr Senyo
Hosi.

Ernst and Young was expected to submit its report
by the end of July 2014, but it has asked for
extension because it is yet to receive the needed
data from the banks to conduct the audit.

Source - Daily Graphic

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