A former Chief Executive of the Ghana National Petroleum Corporation (GNPC) Mr Alex Mould is proposing the privatization of the West African state oil refinery, TOR.
This, he said, is to make the refinery very efficient and profitable.
According to Mr Mould, privatizing TOR could be one of the surest ways to deal with the challenges that have prevented the refinery from making good profits over the years.
His proposal follows revelations in an internal management report which suggested that the state refinery was facing some serious liquidity challenges that threatened its operations.
It would be recalled that energynewsafrica.com reported last week that Tema Oil Refinery (TOR) had incurred GHS 186million loss in the first four months of 2019 due to a number of factors.
The 2019 TOR’s Variance Report revealed that the company was not in a good financial position to even pay its debts.
However, in a statement TOR explained that the amount was as a result of financial interest charges and exchange rates differences on TOR’s outstanding legacy debts yet to be paid from the Energy Sector Levies Act (ESLA) proceeds.
“TOR made a gross profit in the first quarter of this year, “indicating that TOR is a potentially profitable company,” a statement signed by Daniel Appiah, General Manager in –charge of Finance said.
The statement admitted that TOR has been facing liquidity challenges culminating in the company’s inability to implement its annual budgets.
“TOR’s revenue targets are not being achieved due to lack of working capital to procure crude oil for processing on a continuous basis. However, fixed costs continue to be incurred,” the statement added.
Commenting on the issue on an Accra based Joy FM, Mr Alex Mould charged the Akufo-Addo led government to improve the current state of infrastructure at the refinery.
“I would advise the government to fix Tema Oil Refinery if it believes that the rate of return that they put into Tema Oil Refinery is good for them,” he said.
He also argued that government must look at TOR’s model again – that is whether it should still be a refinery or use it as a tank farm or bring on board a strategic investor to turn around the operations of the facility.
The former GNPC boss has also advised that the government should engage Bulk Distribution Companies (BDCs) to invest in the refinery.
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