Fuel under ‘lock and key’ over GH¢1.8 billion debt

June 23, 2014 - page 16 

 The government’s GH¢1.8 billion indebtedness to bulk oil distribution companies (BDCs) has taken a new dimension, with the potential to negatively affect the supply of petroleum products across the country in the coming weeks.

This is because international suppliers of petroleum products have put under ‘lock and key’ one week’s supply of petrol and diesel until the BDCs honour their debt obligations to the suppliers.

To compound the problem, local banks have declined to issue letters of credit (LCs) to the BDCs to pay off their debts to their international suppliers because the current debt is threatening the survival of the banks.

The Chief Executive Officer (CEO) of the Ghana Chamber of Bulk Oil Distributors (CBOD Ghana), Mr Senyo Hosi, told the Daily Graphic in an interview that the situation would create fuel shortages across the country within a week if the government did not take immediate steps to pay its debt to the BDCs.

However, a highly-placed government source, which acknowledged the problems facing the BDCs, said the government and its agencies were in talks with the companies to resolve the issue once and for all.

It said there was no cause for alarm because the situation would be normalised in no time.

Audit of debt

Meanwhile, the government has tasked international audit firm, Ernst and Young to, conduct an audit into the GH¢1.8 billion debt, being subsidies on petrol and diesel from July 2011 to date.

It will take about six weeks for the audit to be completed, but Mr Hosi indicated that the situation would get out of hand if the BDCs had to wait for six weeks before discharging fuel products.

Welcoming the government’s decision to audit the claims of the BDCs, he said, “Since it will take six weeks to complete the audit, vis-a-vis the urgency of the crisis we face, partial payment must be made.”

“In principle, the parties, including the government, the National Petroleum Authority (NPA), the BDCs and the banks, do agree that a debt exists in some form,” he said. 

 To establish “funding confidence in the industry”, he suggested that the government needed to make some payment to resuscitate the supply of petroleum products to the market. 

Stop subsidising

While indicating that fuel shortage was imminent, as a result of the outstanding debt, Mr Hosi said there was no need for the government to continue subsidising fuel products.

He said there was lack of clarity on the government’s commitment to honour its debt obligation, while it continued to subsidise fuel.

“When you continue to subsidise, you are digging a bigger hole because you are increasing debt without clearing it. You don’t solve a problem by creating more problems,” he said.

Meanwhile, there was fuel at filling stations in some parts of Accra, in spite of speculations that fuel shortage will hit the country soon, reports Seth J. Bokpe, ACCRA.

Out of the 16 fuel stations the Daily Graphic visited at Adabraka, Kaneshie, Darkuman, Sakaman, the Kwame Nkrumah Circle, Odorkor, Osu and along the Farrar Avenue, only two did not have diesel or petrol.

Attendants at the Sky Oil Filling Station at the Nkrumah Circle told the Daily Graphic that the station had run out of petrol since last Friday.

And at the Total Filling Station near the Ghana Commercial Bank at Circle, the attendant said the station ran out of diesel Friday.

However, at the Adabraka Total Filling Station, near the Roxy Cinema, an attendant told the Daily Graphic that there was enough fuel to last for even two weeks.

The story was different at the Shell Station near Abossey Okai where the attendant said the station had taken delivery of fuel on Saturday.

At the Kaneshie-Odorkor GOIL Station, the attendants said they had enough fuel to last until Tuesday but were not sure when the next consignment would arrive.

At the Darkuman Total, the attendants said the last time the station received fuel was 10 days ago.

“All we have heard are rumours of an impending fuel shortage, but we have enough to go for a week or two,” the attendants, who asked for anonymity, said.

At the Sakaman GOIL and Shell stations, busy fuel attendants said the two stations had enough fuel. They, too could not tell when their next delivery would arrive, nor could they tell when what they had now would finish.

It was the same story at OJK Oil and Darkuman GOIL, both at Darkuman, and the Goil and Shell Filling stations at the Kwame Nkrumah Circle.

However, at the Accra Sports Stadium, an attendant said if the station did not receive any fuel by Wednesday, then there would be shortage.