The Chamber of Bulk Oil Distributors (CBOD) says although the government has paid GH¢412 million of its debt to the members of the chamber, there is still an outstanding balance of $552 million.
Out of the amount, $480 million represents under-recoveries from 2013 to 2014, while $72 million stands for interest on pre-financing of the price under-recoveries from July 2011 to December 2014.
Under-recovery refers to the inability to fully recover the contract sum at which products are supplied to the market as a result of negative differential between the exchange rate applied by the National Petroleum Authority (NPA) in determining prices at the pump and the exchange rate at which the Bank of Ghana supplies foreign exchange to honour the supply contract.
This situation is the resultant effect of the depreciation in the cedi.
The chamber, however, acknowledged that more than GH¢412 million had been accrued in over-recoveries (profit) to pay off price under-recoveries (loss) due to its members.
According to the chamber, the GH¢412 million was the balance for under-recovery for subsidies on petroleum products for the period from July 2011 to December 2013.
In an interview with the Daily Graphic in Accra yesterday, the Chief Executive Officer (CEO) of the chamber, Mr Senyo Hosi, explained that the money was recouped from gains made from the drop in crude oil prices on the world market.
In June last year, the government released an amount of $150 million to enable Bulk distribution Companies (BDCs) to lift petroleum products to feed the market.
“The impression being created is that the government has fully settled its debts with the BDCs but let it be on record that the government still owes us,” Mr Hosi noted.
He said the BDCs were reconciling their figures for onward submission to the NPA for audit.
Ghanaians faced shortage of petroleum products in the last week of June 2014 due to liquidity challenges faced by the BDCs.
Financiers of the BDCs declined to release more funds for the purchase of petroleum products because the BDCs were highly indebted to them.
The government on the other hand was also indebted to the BDCs.
An international audit firm, Ernst and Young, was contracted by the Ministry of Finance in the second week of June 2014 to audit the claims of the Bulk Distribution Companies (BDCs) before payment.
It has since completed its work and it was based on its final report that the government settled the rest of its July 2011 to December 2013 debt.
Cause of debt
The government’s indebtedness to the BDCs was as a result of forex losses, which was attributed to the depreciation of the cedi.
The government did not pass on the loss to the consumer through forex subsidy, which in the end piled up the debt from June 2011 to December 2013.