The Institute for Energy Security (IES), an energy think tank in the West African nation, Ghana, has welcomed the decision by the National Petroleum Authority (NPA) to withdraw a directive to OMCs to increase BOST and Unified Petroleum Price Fund (UPPF) margins.
According to the IES, had the decision by the NPA to review upward the UPPF and the BOST by GHp1 (one pesewa) and GHp3 (three pesewas) respectively made to stand, it would have automatically increased the price of fuel at the pumps.
Ghana’s petroleum downstream regulator, NPA, last Sunday, directed Oil Marketing Companies (OMCs) to review the two margins but consumer advocacy group, COPEC and the Minority in Parliament opposed it.
Commenting on the issue, Executive Director of Institute for Energy Security (IES), Paa Kwesi Anamua Sakyi said the IES was very much concerned about the increase in especially the BOST Margin.
He said aside impacting on consumers negatively as they would have had to cough more cedis to get a gallon of gasoline, for instance, it would have served as a fertile ground for BOST to be more inefficient in the delivery of its mandates.
“BOST must deal with the waste in its system, and, then, there wouldn’t be the need to increase their margin as applied on the PBU. BOST’s open justification of the increase in the margin is untenable.
“How could the Managing Director of BOST suggest that the upward review of the margin is necessary to make BOST efficient?” he posed.
“If you must be regarded as efficient, then, you rather require less resources to deliver a bigger or larger output instead of a much bigger resource which may deliver the same outcome or even less,” he added.
Mr Anamua Sakyi noted that over the past few years, BOST has failed to activate fully its existing infrastructure (storage tanks and pipelines etc), and been unable to keep strategic fuel stock for the country, enough stock to cushion the country from supply and price shocks.
He said until the Management of BOST can justify and show proof of prudent use of resources and infrastructure currently at its disposal, the IES would not support any review in the BOST Margin.