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.

By: graphic.com.gh