The Chamber of Bulk Oil Distributors (CBOD) has raised the alarm over a plan by the Government of Ghana to make the Bulk Energy Storage and Transportation (BEST) Company, formerly known as Bulk Oil Storage and Transportation (BOST) Company, the sole off-taker of refined petroleum products by Chinese firm, Sentuo Oil Refinery Limited, under the Gold for Oil (G4O) programme.
The G4O programme is a government-led initiative to address the depreciation of the local currency, Cedi, against international trading currencies.
Sentuo commenced operations recently and has since been selling products like diesel and petrol to bulk oil distributors who then sell them to oil marketing companies before retailing to final consumers.
But a statement issued by Patrick Kwaku Ofori (Ph.D.), the Chief Executive Officer of CBOD, on Thursday, 25th April 2024, and copied this portal, claimed that Sentuo’s petroleum would be sold to a single off-taker who would then resell to BDCs if the plan goes through.
According to members of CBOD, information available to them indicates that the plan has been necessitated by government’s aim to control the exchange rate by indirectly ceding Sentuo’s cedi liquidity through BEST for the latter to manage USD allocations under the G4O programme.
“We are convinced that this plan is inconsistent with the deregulation policy that guides the activities of the petroleum downstream sector.
“We object to this proposal and respectfully appeal to the Economic Management Team (EMT) & the Vice-President, Dr. Alhaji Mahamudu Bawumia, to review this proposal,” CBOD said.
CBOD cautioned that this proposal would create market challenges and deficiencies, which will in the medium to long term inevitably cripple the downstream sector.
“Providing the needed USD liquidity under the G4O programme can still be achieved without necessarily anchoring the entire output of Sentuo Oil Refinery Limited (SORL) with BEST, formerly known as Bulk Oil Storage and Transportation (BOST) Company,” CBOD stated.
The Chamber has given an assurance that it is committed to working with the government to develop a workable G4O framework that fosters fair market practices and transparency, while promoting innovation, sustainability and an efficient downstream petroleum sector in Ghana.
Source: https://energynewsafrica.com