[ 2014-09-29 ]

Ghana Well Placed To Export Petroleum Products
The Chief Executive Officer (CEO) of the Chamber
of Bulk Oil Distributors, Senyo Hosi has stated
that Ghana is well placed to export petroleum
products to other countries in the sub-region.

According to him, Ghana can only achieve the feat
if politicians allow the private sector to take
over the petroleum industry.

Mr. Hosi disclosed this in an exclusive interview
on the activities of the BDCs in the downstream
sector, management of petroleum products in the
country, government subsidies and other related
matters.


Below is the full text of the interview:

Can you disclose your total storage capacity?
Our mandate really is to import fuel products,
store and also to bulk sell products even when
refined from the shores of Ghana to Oil Marketing
Companies (OMCs). And we prosecute that mandate by
ensuring that as much as possible we can cover
everyday stock.

Sometimes the stock levels are high, sometimes
they are low but as long as we cover everyday, I
think we are feeding the economy as we should.

The programmes that the BDCs have now adequately
cover everything that we need (petroleum
products). So everyday products will always be
available and we are always developing new
programmes for the future.


How much have you invested in infrastructure so
far

BDCs' total investments exceed over $450 million
with over $350 million in infrastructure
investments. As part of the objectives, BDCs are
expected to invest in supply chain infrastructure
to augment existing investments by government.

I am proud to say private BDC investments by BDC
as of today in non-refinery storage outstrip
existing Government of Ghana investments. Private
storage capacity stands at over 366 million litres
out of total non-refinery storage of 702 million
litres. Additional investments are on-going to
shore up domestic capacity.


What is the level of government's indebtedness to
BDCs

Government's debts have always been going up due
to the subsidies on petroleum products. And all of
that has culminated into the current liquidity
crisis and the dampening of funding confidence in
the industry. The numbers put out by the media on
how much government owes us is not wrong.

The liquidity problem we have is the function of
government debt and also the OMCs. We have always
been giving OMCs credit. So the debt that they owe
is significant but it's largely what we have been
giving them.


Can you disclose the exact amount of money
On the price subsidy side, we have made a claim of
$450 million but only $150 million has been paid
by government. Currently claims for Forex lose are
also being audited. So until the auditing is
completed, I will not be able to tell you the
total debt owed by government.

The OMCs owe us GHc1 Billion but it is only a
month credit.

Why do you always stop distributing petroleum
products when government delays in payment of
monies owed you. Is that the only way you can get
government to pay the debt.

We don't stop distributing fuel…what happens is
that we lose the capacity to distribute fuel
because we don't have it. We are funded by the
banks so the more we are indebted to them, the
less we get funds. Will you continue to give money
to someone who has not paid the initial debt?


What is your take on government subsidies

Government subsidies are well intended but I don't
think that they are best applied. The monies
government has spent on subsidies for the last two
years cumulatively is over $1.5billion.

The money can build a whole refinery that can
convert Ghana into a net exporter of petroleum
products to West Africa and help us earn more
foreign exchange than we currently do.

The money can also revolutionize our entire
transport system. So I think that we can spend
money better as far as subsidies are concerned.
There are ways to meet the needs of the people who
need the subsidies.

When we subsidy, we encourage inefficiency and
smuggling, so the net cost of subsidy is
counterproductive. If you are looking at the
masses and you want to support them, I think we
should invest a lot more in mass transportation.
Invest in mass transportation and you can subsidy
it.

For example if we want to subsidize Metro Mass
Transport, we will not be spending so much on
block fuel subsidy. When you try to subsidize, you
create a lot more physical cost and the same
person you are claiming you are protecting will
have to pay (tax).


What is your view about the politicization of the
petroleum issues

Politicians need to avoid the fuel issues.
Otherwise the more and more they get stuck in it,
the more we get less productive with the spending
of taxpayer's money and that can negatively impact
on the economy.

Politicians will always have a reason why they
would want to think about petroleum because petrol
has had a very strong play in Ghana politics in
some time past.


Any suggestions on how we can solve the petroleum
problem

Basically I think that we need to review the
politics in petrol and we may have to do it
gradually. We must think about how we can
encourage people to use less fuel and mass
transportation is key to reducing our fuel
consumption. However, the fuel must be available
and the public sector must be allowed to drive the
sector. We have over 127 OMCs and LPGMCs, and 24
BDCs which clearly indicates that the economy is
ripe to drive competition but when government
keeps regulating then there is only one thing that
we open ourselves to which is more inefficiencies
on the part of both government and petroleum
service providers including BDCs.


What is the future of the BDCs?
We have a perfect opportunity to metamorphosize
into exporters of petroleum products, and that
will make us major players in the refinery
industry.

Ghana is well placed to become a net exporter of
petroleum products to the West African region.

The BDCs' success thus far is evidence of the
Ghanaian entrepreneur's ability to unleash the
nation's potential when given the chance and this
must be encouraged.

Source - Daily Guide

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