Ghana: The Future Of The Petroleum Downstream Industry Under Hassan Tampuli
The influence of a regulatory authority’s work over an industry like the petroleum downstream may not be as apparent, as perceived by the general Ghanaian public.
Nonetheless, as the regulator for the downstream petroleum industry, the National Petroleum Authority (NPA) has over the past few years been embarking on strategic initiatives that are designed to efficiently bring relevance to all industry players, while emphasizing compliance to the Authority’s standards and criteria, for operating within the downstream industry.
Safety is deliberately a constant feature in all of the Authority’s campaigns, as it endeavors to deliver maximum satisfaction to the Ghanaian consumer, as well as various stakeholders within the sector.
At the 3rd Ghana International Petroleum Conference (GHIPCON), the Chief Executive of NPA, Mr Alhassan Tampuli revealed that the sector has “contributed over GHS86 billion to Ghana’s GDP representing an average of about 8% per annum in the period 2013 to 2018”.
This is testament to the downstream petroleum industry’s significance to Ghana’s economy. The growth in consumption of “15% from 3.4million Mt in 2017 to 3.9 million Mt in 2018”, according to Mr Tampuli, makes safety a key feature in regulation.
With the petroleum downstream consisting of everything from fuel refinery to delivery to the final consumer, safe storage and transportation of products is crucial. Hence, the NPA’s Safety Campaign, which was launched in 2017.
Recent occurrences reveal this campaign’s importance, and the need to laud NPA for the initiative’s successes.
At least 50 people died, and 101 sustained severe injuries when a petrol tanker exploded in Benue, Nigeria.
Despite the lives lost and injuries caused, the damages extend beyond the accident. This confirms the potential hazard posed by Bulk Road Vehicles (BRVs).
Adherence to safety measures would have prevented this accident. But simple statements of concern aren’t enough to ensure safety.
The causes, are interrelated in a conspicuous chain of events. Media reports suggest siphoning of fuel by villagers, who live around where the BRV toppled over due to poor state of the road as the cause. But the driver’s negligence, or the BRV’s poor condition may have been the cause.
Therefore, much as the NPA and industry players are working with Roads and Highways Department to make roads motorable, the NPA is not relenting on its efforts.
To curb such occurrences, the Authority under Mr Tampuli is taking proactive measures, including; licensing of BRVs, rigorous inspection of BRVs, pre loading inspection of BRVs, training of BRV drivers, and installation of tracking devices on BRVs.
In line with NPA Act, Act 691, 2005, BRVs that fully meet licensing requirements are licensed prior to approval to load petroleum products from licensed depots. A total number of 3,468 BRVs have been licensed. But BRVs still operate illegally, causing the NPA to collaborate with the security agencies to prevent illegal operations.
Also, BRV inspection companies, with DVLA licensing have been licensed by the Authority to inspect BRVs, before they are licensed biannually.
Again, loading depots are authorized to inspect all BRVs before loading, to ensure that they have authorization and are safe to load, before allowing them to load petroleum products.
In line with the Road Traffic Regulations 2012, L.I 2180, the NPA collaborates with the DVLA and Road Safety Limited to develop modules for training and certification of BRV drivers in defensive driving and safe handling of petroleum products.
These trainings help to prevent accidents and crimes like the diesel tanker driver and his mate, who set a tanker on fire in the Eastern Region. They emptied and sold its 54,000 litre diesel load worth GHC280, 260. This theft would have cost the BRV owner so much without tracking of the BRV.
The NPA installs tracking systems on BRVs for independent monitoring to confirm delivery of petroleum products, from loading depots to various discharging points nationwide.
Current installation of,1000 more digital tracking devices to augment what exists will further restrict the criminals like the tanker driver and his mate, diverted diesel meant for Yendi, and sold the entire load before setting the BRV ablaze.
Through these strict measures, the USD12million losses recorded annually by the Unified Petroleum Price Fund (UPPF) will be prevented, and efforts increased to ensure effective and efficient distribution of fuel nationwide.
The NPA’s task is great. But under Mr Tampuli’s leadership, and staff efforts at the NPA, though daunting, the challenge posed by the expected growth of the industry is surmountable, and requires collaboration from all stakeholders.
Source: Ijahra Musah Larry
Tanzania: 61 People Killed In A Fuel Tanker Explosion
At least 61 people have been killed and 70 injured when a fuel tanker exploded on a busy road in Tanzania, government spokesperson Hassan Abbas said.
The vehicle overturned on the road in Morogoro, 175 kilometers (109 miles) west of Dar es Salaam, according to Kebwe Stephene, the regional commissioner of Morogoro.
An eyewitness said the truck was going at speed and was trying to avoid a motorcyclist on the main road near Msamvu bus station. The driver appeared to lose control and the truck overturned.
The bus station serves as a major hub for passengers traveling to other parts of Tanzania and is a popular spot for boda-bodas, motorbike taxis common in the region.
Stephene said the crash attracted a large crowd. When someone noticed the truck’s cargo was leaking, many rushed to get buckets and containers to collect the fuel.
According to eyewitnesses, there were more than 150 people at the scene when the truck exploded around 20 minutes after the accident.
“We just heard an explosion and then the motorbikes were falling all over the place, we were running around,” said Hamza Jones, one of the witnesses. “I fell down there because everyone was trying to run and so they were pushing each other,” he added
Photographs of the incident show large flames and thick black smoke rising from the wreckage and dozens of motorbikes scattered around.
Abbas said authorities believe many of the dead are people who were trying to collect the fuel from the truck.
The explosion happened around 8:30 a.m. local time (1:30 a.m. ET). Abbas said the rescue operations finished by 3 p.m. local time. The scene was cordoned off and all bodies were removed from the scene into a local hospital for identification, he said.
Those injured in the blast were treated at the government-run Morogoro Referral Hospital, Abbas added.
The road connecting Morogoro with Dar es Salaam, the country’s most populous city and former capital, is one of Tanzania’s key throughways, used to transport imports and exports to and from the coast.
Source: cnn/energynewsafrica.com
According to eyewitnesses, there were more than 150 people at the scene when the truck exploded around 20 minutes after the accident.
“We just heard an explosion and then the motorbikes were falling all over the place, we were running around,” said Hamza Jones, one of the witnesses. “I fell down there because everyone was trying to run and so they were pushing each other,” he added
Photographs of the incident show large flames and thick black smoke rising from the wreckage and dozens of motorbikes scattered around.
Abbas said authorities believe many of the dead are people who were trying to collect the fuel from the truck.
The explosion happened around 8:30 a.m. local time (1:30 a.m. ET). Abbas said the rescue operations finished by 3 p.m. local time. The scene was cordoned off and all bodies were removed from the scene into a local hospital for identification, he said.
Those injured in the blast were treated at the government-run Morogoro Referral Hospital, Abbas added.
The road connecting Morogoro with Dar es Salaam, the country’s most populous city and former capital, is one of Tanzania’s key throughways, used to transport imports and exports to and from the coast.
Source: cnn/energynewsafrica.com Nigeria: Mele Kyari Urges NLNG Management To Look Beyond Train-7FID
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has urged the Management of the Nigerian Liquefied Natural Gas (NLNG) to set their gaze beyond the execution of the much awaited Final Investment Decision on Train-7 billed for October, 2019.
Welcoming the top-level NLNG Management team, led by its Managing Director, Engr. Tony Attah, to the NNPC Towers on, Kyari charged the company to consider the October Train-7 FID on the project as a done deal, noting that the focus should be on “what else can we do beyond Train7 to expand NLNG operations’’.
The 8Million-Tones Per Annum (MTPA) Train -7 project is designed to expand the company’s production capacity from 22- 30MTPA.
The NNPC GMD assured of the unflinching commitment of the Federal Government and the NNPC Management in the future expansion drive of NLNG, saying all obstacles that could impede the actualization of the Train-7 FID project should be promptly identified and removed ahead of the October 2019 timeline.
Engr. Attah, in his presentation, applauded the historic role of the NNPC in the successful midwife of NLNG, 30 years ago, through sheer vision and sense of purpose.
The NLNG MD said the company would be relying on the usual invaluable support from the corporation to achieve the successful execution of the Train-7 FID project and lots more.
He announced that the project would generate a projected 12,000 jobs with massive spine-offs on the nation’s economy.
Ghana: OMCs Cited In Auditor General’s Report Are Not Defaulters- AOMCs
The Association of Oil Marketing Companies in the Republic of Ghana has explained that some of its members who were cited in the 2016-2017 Auditor’s Report as having defaulted in their tax obligations have fulfilled “these obligations honourably.”
The Association, thus, sees no reason the media should feast on the report and make it look as if its members were wrongdoers.
Media reports suggested that the Auditor General’s report has cited OMCs such as GOIL, Radiance Energy, Star Oil and others for defaulting in taxes and levies due to the state.
But a statement signed by Kwaku Agyeman-Duah, who is the Industry Coordinator and Chairman of the Association of Oil Marketing Companies, offered clarification.
Below is the full statement
Our attention has been drawn to some media discussions on a section of the above report, implicating some OMCs/LPGMCs in the non/delayed payment in petroleum taxes and levies in respect of November 2016 to November 2017.
We would like to clarify as follows;
Most of the OMCs/LPGMCs mentioned in the report therein have fulfilled these obligations honourably. The few others have either had their indebtedness rescheduled or reconciled appropriately.
Some of the purported debts were as a result of liftings which were tax exempt, but have since been appropriately reconciled and declared. Audit queries per such indebtedness have been duly addressed and OMCs/LPGMCs have been cleared from list of defaulters.
It is pertinent to note that the nature of tax payments usually results in some form of arrears from month to month on Ghana Revenue Authority (GRA) books, due to when petroleum products were lifted and when the 21 + 4 days payment window starts and ends.
The period under review (November 2016 – November 2017), witnessed unprecedented spate of the illegal fuel smuggling which culminated in the delay or non-payment of taxes, a result of low sales at retail outlets due to stock turnover from fourteen (14) days to forty-five (45) days on the average.
It is noteworthy that we are obliged to pay the taxes whether products are sold or not, hence OMCs/LPGMCs resort to borrowing from banks at high interest rates to settle such taxes, reducing their financial strength especially so, when bulk consumers like unpaid contractors are amongst the defaulters. Nevertheless, it is in this vein that we are clamouring for a “Pay As You Sell” (PAYS) policy, where OMCs/LPGMCs pay taxes on volumes of products sold, not just on the volumes lifted within a window.
Further, there currently exist the Electronic Record & Document Management Systems (ERDMS) which makes it impossible for OMCs/LPGMCs owing taxes, no matter how little, to continue lifting petroleum products.
Finally, we would like to reiterate the commitment of over one hundred and thirty (130) OMCs/LPGMCs (who routinely pay their taxes), to continue working closely with the major stakeholders to ensure maximum revenue generation for government and entrench our position as responsible corporate citizens.
Kwaku Agyemang-Duah
Industry Coordinator
Source: www.energynewsafrica.com
PDS Saga: Donewell Backs Gov’t’s Decision To Investigate Deal
Donewell Insurance Company Limited (DICL), an indigenous Ghanaian insurance company at the centre of the botched Power Distribution Services (PDS) concession agreement, has welcomed government’s decision to investigate the deal.
The company in a statement said, all appropriate processes were followed throughout its handling of the deal and accused Qatar-based Al-Koot Insurance and Reinsurance Company of deceit.
Government of Ghana about two weeks ago suspended the concession agreement Electricity Company of Ghana signed with the Power Distribution Services Ghana Limited over what it described as the ‘fundamental and material’ breaches of the agreement.
PDS worked with Donewell Insurance to finance the deal. They then engaged Jordanian based broker JoAustralia Reinsurance Brokers who were tasked with the job of finally making the required payments to secure the final demand guarantees from Al Koot.
But Al Koot on July 16, 2019, through its Chief Officer General Insurance, Mr Osman Hag Musa, wrote to ECG alerting them about a situation of fraud in which the initial guarantee submitted was allegedly forged by an employee of the company who lacks the authority to issue such a guarantee.
Donewell explains in the statement that a key component of the agreement was to find an ‘A’ rated Standard & Poor’s company to reinsure the Guarantee and DICL’s brokers, JoAustralia Reinsurance Brokers secured a cover from Al Koot in accordance with international best practices.
Prior to the payment of premium to its Broker, DICL said it sought the requisite approvals from its Regulator to allow for the payment of premium for the reinsurance of the Guarantees, which was duly made to the Broker through a Swift Payment to complete the process on March 21, 2019.
The company, in view of this, “expresses its deepest shock at and disagreement with the allegations made by Al Koot in its letter dated July 16, 2019.”
The statement added: “It is important to note that in an email dated July 22, 2017 sent by Yahya Ali Al Nouri, the Reinsurance Manager of Al Koot, in which Osman Hassan Hag Musa, the author of the July 16, 2019 letter was copied, Mr Al Nouri is designated as a signatory to the technical documents of Al Koot. On February 26, 2019, Al Koot made a request to JoAustralia to arrange a full retrocession of its share/portion of the risk/guarantee; which request was acceded to by JoAustralia.
“On April 16, 2019, JoAustralia sent a credit note to Al Koot notifying the latter that in accordance with the mutual agreement between the two companies, JoAustralia had credited Al Koot’s holding( Client) Account as per a credit note dated 16th April,2019,” the statement.
In the circumstances, DICL as a responsible corporate citizen welcomes the decision of the Government of Ghana to investigate the allegations of fraud related to this transaction, the statement added.
Source: myjoyonline.com/www.energynewsafrica.com
Source: myjoyonline.com/www.energynewsafrica.com Texas A&M, Petrochemical Companies Partner To Train Emergency Responders
In a new approach to help protect their facilities and the citizens who live nearby, several petrochemical companies are partnering with the Texas A&M Engineering Extension Service (TEEX) to provide emergency response training to the agencies surrounding their plants to protect community safety.
Though incidents are rare at the nation’s petrochemical plants, when a fire occurs as it did at the Intercontinental Terminals Company in Deer Park earlier this year, the company and the community rely on mutual aid help from other nearby companies they have agreements with. However, when the plant in trouble is isolated with no other companies located close enough to help respond, they have to rely on local first responders to assist in extinguishing the blaze and protecting the community.
Some petrochemical plants are located in small or rural communities where the local volunteer fire department or municipal fire department may not have the funding to send their firefighters to the specialized training needed to fight these kinds of fires, said John Burge, who directs the industrial firefighting program at TEEX’s Emergency Services Training Institute (ESTI).
Valero, ExxonMobil Pipeline Co. and LyondellBasell are among the companies that have recently established training grants and partnered with TEEX to provide hands-on fire and hazardous materials training to firefighters from communities that surround their plants in the Houston area, across Texas and the Midwest. The training grants cover the costs for the firefighters to attend specialized training courses at the 296-acre Brayton Fire Training Field in College Station, Texas, which is one of the largest live-fire training facilities in the world.
The specialized TEEX course, “Industrial Emergencies for Municipal Based Responders,” or IEMBR, was requested by LyondellBasell for firefighters that serve communities around their facilities.
“Safety is embedded in our company culture and our staff often trains with local first responders to improve preparedness,” said Dale Friedrichs, LyondellBasell vice president, Health, Safety and Environment. “Texas A&M offers exceptional training which broadens the skills of firefighters. We understand the funding challenges that some municipalities face, and we’re honored to support those who put their lives on the line every day.”
“Funding from Valero allowed us to train approximately 60 firefighters from across the Midwest in the proper techniques for extinguishing ethanol fires,” Burge said. “These firefighters from communities surrounding Valero plants will take those skills back home and share their new knowledge with fellow firefighters where they will be better prepared to respond to emergencies and help protect their community and the Valero assets. This is good for both the community and the facility.”
The firefighters who come to Brayton Fire Training Field for training get hands-on experience fighting actual fires on large, full-scale props simulating industrial plants, storage tanks, pipe racks, process units, rail car loading terminals, hazmat chemical leaks and crude by rail fires. “Lectures only go so far,” Burge says. “Until they actually fight these fires, the lessons can be difficult to learn; but once they ‘look the devil in the eyes,’ they won’t forget.”
For ExxonMobil, TEEX is providing 16 hours of training for up to 150 firefighters in HazMat liquid pipeline and industrial fire emergencies.
Malaysia: Barakah Takes Petronas To Court Over Licence Suspension
Malaysian offshore services provider, Barakah Offshore Petroleum has sued compatriot Petronas for RM 1.02 billion ($243.7 million).
Barakah said earlier this week in a filing with Bursa Malaysia that its wholly-owned unit PBJV had issued a notice of demand and dispute on August 5 to both Petronas and Petronas Carigali after the company’s license was suspended by Petronas for three years.
Namely, the three-year suspension, issued on July 8, was based on the grounds of adverse reports of PBJV’s performance under a contract for provision of underwater services for Petronas Carigali.
Barakah added that this suspension was issued after the completion of the contract. In response to the suspension, PBJV issued a notice to dispute the validity of the suspension.
The company said that the contract was successfully carried out and completed prior to the suspension. Also, Barakah stated that “upon completion of the contract, the positive appraisal was subsequently given by Petronas Carigali hence making the suspension unwarranted.”
With the license suspended, PBJV is unable to undertake or bid for new contracts from Petronas but it is still allowed to continue and complete its existing and on-going contracts with Petronas.
According to the offshore service provider, the amount of RM1.02 billion was based on the loss of future profits, reputation, and shares’ market price.
It is worth noting that Petronas and Petronas Carigali were given 14 days to comply with the demand.
Source: offshoreenergytoday.com
Occidental Closes $55 Billion Worth Acquisition Of Anadarko
Occidental Petroleum has completed its acquisition of Anadarko Petroleum in a transaction valued at $55 billion, including the assumption of Anadarko’s debt.
Occidental entered into a race with Chevron for the acquisition of Anadarko back in April.
Soon after, Chevron dropped out of the race leaving the road clear for Occidental to make a deal with Anadarko.
The merger was approved by U.S. antitrust regulators in early June and Occidental announced the completion of the acquisition on Thursday, August 8.
The closing of the transaction follows approval of the transaction by Anadarko’s shareholders at a Special Meeting held on Thursday where more than 99% of the shares voted in favor of the Occidental merger agreement.
Anadarko shareholders are receiving $59 in cash and 0.2934 shares of Occidental common stock per share of Anadarko common stock in the transaction. Effective after the end of trading on Thursday, Anadarko’s common stock is no longer trading on the New York Stock Exchange.
“With Anadarko’s world-class asset portfolio now officially part of Occidental, we begin our work to integrate our two companies and unlock the significant value of this combination for shareholders,” said Vicki Hollub, President and Chief Executive Officer.
“We expect to deliver at least $3.5 billion annually in cost and capital spending synergies and the focus of our Board and management team is on execution to achieve the promise of this exciting combination. We look forward to updating the market on our continued progress in the months ahead.”
Source: offshoreenergytoday.com/www.energynewsafrica.com
PDS/ECG Saga: We did due diligence-MiDA
The Millennium Development Authority (MiDA) has rejected assertions that it should be blamed for the current brouhaha surrounding the transfer of distribution business of Electricity Company of Ghana (ECG) to the Power Distribution Services Ghana Limited.
The PDS’s operations have been suspended by the Government of Ghana, pending investigations into fundamental and material breaches of the former’s obligation in the provision of Payment Securities (Demand Guarantees).
According to MiDA, each step of the ECG/PSP transaction process, prior to the handover of ECG’s distribution business and assets to PDS, was subjected to careful scrutiny and various stakeholder approvals.
“It is worthy to note that each step of the transaction process prior to the handover of assets to PDS required in-depth reviews of various pertinent issues, including submitted documents.
“In line with best practice in International Business Transactions, all documents submitted as part of the transaction were accepted on the basis of good faith and the presumption in law as to their validity,” MiDA said.
Energy Think Tank, Africa Centre for Energy Policy (ACEP) recently demanded the immediate interdiction of the leadership of the Millennium Development Authority (MiDA)-the implementing agency for Ghana’s Power Compact, following government’s suspension of the Power Distribution Services (PDS) over what it says were fundamental and material breaches in the payment of demand guarantees by the PDS.
ACEP blamed MiDA for shrouding the processes leading to the selection of PDS in secrecy.
But in a statement issued by MiDA Thursday, August 8, 2019, the authority said the allegations could not be true.
“It has taken MiDA some four years to work with all stakeholders, namely the Electricity Company of Ghana, Energy Commission, the Public Utility Regulatory Commission, Ministry of Finance, Ministry of Energy, the Office of the Attorney General and Ministry of Justice, the Government of Ghana, Parliament of the Republic of Ghana and the Millennium Challenge Corporation, in order to follow through all the processes towards the procurement of the services of a competent private sector operator to operate and manage the assets of ECG.
“This collaborative effort culminated in the birth of Power Distribution Services Ghana Limited (PDS). Every decision taken on the transaction and coordinated by MiDA was duly screened by all relevant stakeholders and received due authorization and approval.
“Therefore, and contrary to widely circulated publications, discussions and allegations, MiDA has never acted against the supreme interest of Ghana. As an institution, MiDA works within stringent governance structures that meet international standards.
“These structures comprise oversight by the Board, the Government of Ghana and the Millennium Challenge Corporation. Every decision on the transaction was made within this governance structure,” the statement explained.
According to the MiDA, “while the current development is an unfortunate setback to the progress of the Concession, MiDA wishes to assure the public that it welcomes investigations into this matter.”
MiDA assured Ghanaians that it would continue to work transparently and with a high level of integrity to achieve results in the best interest of Ghana in order to sustain the goodwill and prospects Ghana derives from the implementation of the Millennium Challenge Account Programme.
Below is the full statement
MIDA
‘Suspension Of PDS Agreement Is In The Interest Of Ghana’ –Prez Akufo-Addo
Ghana’s President, Nana Addo Dankwa Akufo-Addo, says government suspended the PDS concession agreement in the interest of the public, and to protect the assets of the Electricity Company of Ghana worth over $3 billion.
According to President of the West African nation, the decision to make the suspension of the PDS agreement public was “for the country to know exactly what is going on, and, therefore, hold the government to account for its stewardship.”
Addressing members of the Ghanaian community in Angola on Thursday, 8th August, 2019, the President explained that his Government inherited an arrangement in which the United States Government, through the Millennium Challenge Corporation (MCC), offered the country half a billion dollars of money for the reform of the energy sector.
“It was decided to incorporate it largely into the reform of the Electricity Corporation of Ghana. One of the conditions of the money was that we should get a private electricity coordinator to partner with the nation to manage our electricity generation and distribution system,” he said.
President Akufo-Addo continued, “After a process of bidding and tendering which left us with one company in the field, an arrangement was made for that company to take over the running of the assets of ECG. Subsequently we discovered that some of the financial instruments the company put in place were not in order, and, as a result of that, we have had to suspend the concession until all the facts are established.”
The President explained that a fundamental part of the agreement required that PDS put up a guarantee to cover some $400 million.
“It turned out that there are problems with this guarantee. Therefore, the protection that we should have in the transaction was not really there. The matter came to our notice, and we decided that the first thing to do was to protect the public assets by suspending the agreement with this private sector operator and returning the assets to the control of the ECG whilst a process of investigation was being carried out,” he added.
President Akufo-Addo told the gathering that he sent a delegation to Qatar on Tuesday, 6th August, 2019, the origin of the guarantee, to find out exactly what the situation was.
“They (Ghanaian delegation) met them (Al Koot Insurance and Reinsurance). They are on their way back. By the time I get back to Accra tomorrow (Friday), we will know exactly where we are,” he said.
The decision to suspend the agreement, the President said, was necessary for “to protect the public interest, and to protect the ECG assets in excess of 3 billion cedis. These are not assets that you can take lightly. They were taken to protect the public interest and to make sure that the delinquency, if that is what it turns out to be, was nipped in the bud as soon as possible,” the President added.
He assured that the suspension of the agreement with PDS “will not disturb the flow of electricity in the country. Things will continue on a stable basis.”
Source:www.energynewsafrica.com
Ghana: ECG & PDS Agree On Interim Modalities To Avoid Disruption In Power Supply
The Electricity Company of Ghana (ECG), which is now the interim operator in charge of management and operation of electricity sales under the license number EC/ESL/02-19-001, and the suspended Power Distribution Services (PDS) Ghana Limited have agreed on interim operational modalities.
The move is to ensure that there is no disruption of power supply and service delivery to consumers.
A statement jointly issued by ECG and PDS Thursday said: “This interim arrangement shall be in force from 8th of August, 2019, until the reversal or otherwise by the Energy Commission.
Per the release, Power Distribution Services will be responsible for meter reading, billing, distribution of bills, bill reconciliation, revenue collection, and new service connections.
PDS will also undertake disconnection exercises, replacement of faulty meters and networks, repair works as well as attend to complaints and fault reporting to the call centres.
“In light of the above, all payments and other related activities shall continue to take place at PDS Regional and District offices, PDS existing Customer Service Centres, PDS licensed vending stations, PDS operated Cash Points and banks,” the statement added.
“ECG and PDS assure the general public that we will continue to provide quality electricity services to our cherished customers.”
“All enquiries should be directed to PDS Call Centre number 0302611611 and all social media handles,” the statement concluded.
The Electricity Company of Ghana, acting on behalf of the Government of Ghana, signed a concession agreement with the Power Distribution Services Ghana Limited on March 1, 2019.
The move was in line with Millennium Challenge Corporation’s Power Compact II, which required private sector participation in the West African country’s power distribution business.
However, barely five months of operations, the Government of Ghana, through the Information Minister, Kojo Oppong Nkrumah, announced the suspension of PDS.
In a statement, government said the suspension was as a result of what it described as ‘fundamental and material breaches of PDS’ obligation in the provision of Payment Securities for the transaction’ which were discovered upon further due diligence.
The statement said a full-scale enquiry into the power concession agreement with PDS Ghana Limited had begun and was expected to last for 30 days.
The statement also said the government had taken steps to ensure that distribution, billing and payment services were not interrupted, and assured the public that the development would in no way interfere with the distribution of electricity services to customers.
Ghana’s electricity regulator, Energy Commission, last week, withdrew EC/ESL/ 02-19-001 license, which the Commission issued to PDS, following the transfer and appointed ECG as the interim operator of the electricity retail sales function in the southern zone under license number EC/ESL/02-19-001.
The Commission explained that its decision was based on the validity of the said license becoming impaired due to the suspension of the operation of Power Distribution Services (Ghana) Limited over some breaches in the concession agreement signed with the Government of Ghana.
Source:www.energynewsafrica.com
Source:www.energynewsafrica.com Ghana: ECG & PDS Agree On Interim Modalities To Avoid Disruption In Power Supply
The Electricity Company of Ghana (ECG), which is now the interim operator in charge of management and operation of electricity sales under the license number EC/ESL/02-19-001, and the suspended Power Distribution Services (PDS) Ghana Limited have agreed on interim operational modalities.
The move is to ensure that there is no disruption of power supply and service delivery to consumers.
A statement jointly issued by ECG and PDS Thursday said: “This interim arrangement shall be in force from 8th of August, 2019, until the reversal or otherwise by the Energy Commission.
Per the release, Power Distribution Services will be responsible for meter reading, billing, distribution of bills, bill reconciliation, revenue collection, and new service connections.
PDS will also undertake disconnection exercises, replacement of faulty meters and networks, repair works as well as attend to complaints and fault reporting to the call centres.
“In light of the above, all payments and other related activities shall continue to take place at PDS Regional and District offices, PDS existing Customer Service Centres, PDS licensed vending stations, PDS operated Cash Points and banks,” the statement added.
“ECG and PDS assure the general public that we will continue to provide quality electricity services to our cherished customers.”
“All enquiries should be directed to PDS Call Centre number 0302611611 and all social media handles,” the statement concluded.
The Electricity Company of Ghana, acting on behalf of the Government of Ghana, signed a concession agreement with the Power Distribution Services Ghana Limited on March 1, 2019.
The move was in line with Millennium Challenge Corporation’s Power Compact II, which required private sector participation in the West African country’s power distribution business.
However, barely five months of operations, the Government of Ghana, through the Information Minister, Kojo Oppong Nkrumah, announced the suspension of PDS.
In a statement, government said the suspension was as a result of what it described as ‘fundamental and material breaches of PDS’ obligation in the provision of Payment Securities for the transaction’ which were discovered upon further due diligence.
The statement said a full-scale enquiry into the power concession agreement with PDS Ghana Limited had begun and was expected to last for 30 days.
The statement also said the government had taken steps to ensure that distribution, billing and payment services were not interrupted, and assured the public that the development would in no way interfere with the distribution of electricity services to customers.
Ghana’s electricity regulator, Energy Commission, last week, withdrew EC/ESL/ 02-19-001 license, which the Commission issued to PDS, following the transfer and appointed ECG as the interim operator of the electricity retail sales function in the southern zone under license number EC/ESL/02-19-001.
The Commission explained that its decision was based on the validity of the said license becoming impaired due to the suspension of the operation of Power Distribution Services (Ghana) Limited over some breaches in the concession agreement signed with the Government of Ghana.
Source: www.energynewsafrica.com
Source: www.energynewsafrica.com
Impacts Of Fuel Price Hikes To The Economic Sector
The speculation that government was once more going to increase taxes on fuels during the 2019 mid-year budget review contrary to public expectations, have been confirmed.
Therefore, in the coming days consumers of petroleum products in the country will be paying more at the pumps as government announces increment in the energy sector levy to raise more revenue to pay off Ghana’s legacy debt.
Presenting the 2019 mid-year budget review speech on Monday, 29 July 2019, the Finance Minister announced an upward adjustment in the Road Fund Levy (RFL), the Energy Debt Recovery Levy (EDRL) and the Price Stabilization and Recovery Levy (PSRL). He stated that government proposes to increase the Energy Sector Levies by GHp20 per liter for petrol and diesel and GHp8 per kg for liquefied petroleum gas (LPG), so as to increase the inflows to enable Government issue additional bonds to pay down the energy sector debt obligations. And so based on current indicative prices for petrol and diesel this translates to GHp90per gallon increment, moving the current average price of both petrol and diesel to approximately GH¢24 per gallon.
Reactions and Concerns
Even before the supposed increments take effect, various groups are expressing their displeasure and opposing the announcement of fuel price increases. The Chamber of Petroleum Consumers (COPEC) have already petitioned the Speaker of Parliament over the proposed increase in components of the Energy Sector Levies (ESLA), suggesting that the current fuel price increase is coming at the wrong time. The group suggest the increase in ESLA will eventually lead to an increase in the current fuel price by about four percent.
It argued that “fuel price increase shall affect every aspect of the economy and could bring serious challenges to the standard of living of persons and their purchasing ability, indicating further that the group will protest the increase in the ESLA levies if attempts at dialogue fail.
Drivers across the various regions are also opposing the announcement of fuel price increases, suggesting that further increase in fuel prices will cripple their business. They are therefore pleading with government not to effect the increment since there is hardship in their business. According to the drivers, an increase in fuel taxes will translate into in a hike in the pump prices which will have a cascading effect on the cost of transportation, goods and services, and the general cost of living in the country.
Quite funny it may sound, but the Funeral Criers Association of Ghana have also responded to the announced fuel price increases by reviewing upwards the rates of their “crying services”. One Ms. Dokli who purports to represent the group claim high demand for their services, amid an increase in fuel prices and general economic hardship have forced them to adjust their fees. She revealed that five dirge-singing criers who used to charge GH¢5,000 a day will now provide the service for between GH¢7,000 and GH¢8,000.
Oil prices have bitten hard over the past two years plus, on both local economies and on the world scale. In economies like Ghana and India where the fuel markets are deregulated, consumers have had to pay for the full cost of fuel consumed as dictated by key variables like the average world oil price (crude and refined), supplier’s premium, freight and insurance premium, taxes and levies, and the foreign exchange risk.
The last 30-months had been a torrid moment for Ghanaians, as they had to contend with persistent increases in fuel prices. And not even the revision and the neutralization of the Price Stabilization and Recovery Levy (PSRL) aimed at reducing the impact of rising oil prices on the international market on consumers, and the downward review of the Special Petroleum Tax (SPT) embedded in Ghana’s Petroleum Price Build-Up (PBU) could stop petrol price from jumping by over 38 percent to sell at Ghs5.25 per liter (equivalent to one U.S. Dollar) between January 2017 and June 2019.
The percentage increment of petrol over the past two-and-a-half years reflects largely the strengthening international refined oil and crude oil prices. However the depreciation of the local currency against the U.S. Dollar made matters worse for consumers.
The two graph shows that the prices of international oil prices and local prices track each other very closely over time; thus increases in crude oil prices are accompanied by increases in gasoline (petrol) prices on the international markets. Moreover, the quarterly changes in international gasoline prices and domestic gasoline prices are also very highly and positively correlated.
The persistent increases in fuel prices since 2017 has had motorists and commuters fuming, with the Chamber for Petroleum Consumers (COPEC) and the Industrial and Commercial Workers Union (ICU) embarking on a demonstration to protest what they called “hardship on the Ghanaian” last year.
While the news story of the “funeral criers” elicited laughter and jokes on social media, for an Accra UBER driver who has fuel to buy or a company that relies on thousand gallons of diesel for production purposes, a discussion on fuel price hikes is not a matter for laughter.
The price of fuel remains a significant determinant of domestic and global economic performance. And the consequences of fuel price increases are grave, as it affects the different macro-economic variables such as production cost, inflation, interest rates, employments, and freights. Hikes in prices of petrol and diesel directly and indirectly affect all the major sectors of an economy like agriculture, transportation, manufacturing and production. This in turn affects the prices of daily essential commodities which are transported, including the cost of food.
Motorists: A direct consequence of rising fuel prices is increase in what motorists spend on fuels every month for the same distance travelled. Back-of-the-envelope estimations show that a person driving 1050km per month in Accra is likely to notice monthly fuel bills in January 2019 go up by approximately Gh¢110 for a petrol car, compared to January 2017 (based on 42 kilometer per gallon journey). Those using vehicles with low carbon footprints are cushioned significantly compared to those with less efficient cars.
The stop-start technology found usually in modern upper-end vehicles, uses computers to sense when the car is in stationary position to shut down the engine, and reduce the consumption and emission of fuel.
Businesses: Higher fuel prices pushes freight cost up and increases production costs for especially businesses that uses fuel as a major input (like power utilities, farmers, and processing plants), and who mostly pass on the added costs to the final consumer. It literally means that prices of essential commodities like fruits and vegetables, as well as other goods and services will increase. And rising production costs also bites hard on products and services demand, business profitability, wages, and employment et cetera.
Public Transports and Commuters: Transport operators are the most exposed to fuel price increases as it remains a major input to their business.
In such a case, individual transport operators who continue to set their own prices in the absence of a single transport economic regulator, are forced to pass on the added cost to commuters in the form of increased fares, most often in a confused manner. The increased fares is also likely to lead to increased number of persons opting to walk or adopting other means of commuting, thus lowering the volume of people on the traditional transport system.
Households: Fuel price increases dents disposable incomes, by adding on to households budgets for not only fuels, but also transport fares and essential commodities and other goods/services like utilities and automobile. High fuel prices over a prolonged period may compel households to re-allocate resources by saving less or cutting down on expenses.
Inflation: If higher prices of goods and services last long, then it will have an inflationary effect. And the economic reaction to higher inflation may eventually result in increased interest rates. On the positive side, those with savings benefits from higher rates. But on the negative side, higher interest rates reduces disposable income of consumers as a result of higher debt service costs; leaving them with less to spend on other products and services.
Aside higher interest rates, prolonged inflation results in higher unemployment, higher utilities, currency depreciation, demand decline, tax revenue decline, and less real economic output; negatively affecting the overall economy.
As long as oil price remains a vital macroeconomic variable, higher prices might lead to significant damage on local economies, and on the global economy. To manage fuel prices and maintain economic progress on the local scale, government must re-invent the ways in which fuel demand is met, focusing largely on fuels from the local refinery (produced below import parity) than on imports. It may consider reviewing the taxes and levies on a liter of fuel, and also ensure that the local currency is strengthened against the major foreign currencies.
Written by Mikdad Mohammed, Institute for Energy Security (IES) ©2019
The writer is an enterprising energy policy researcher and analyst working with the Institute for Energy Security (IES) as a Senior Policy and Research Analyst. He has previously worked with the Bulk Oil Storage and Transportation Company (BOST) within the Corporate Communication section. He is an Alumnus of the University of Ghana.
The last 30-months had been a torrid moment for Ghanaians, as they had to contend with persistent increases in fuel prices. And not even the revision and the neutralization of the Price Stabilization and Recovery Levy (PSRL) aimed at reducing the impact of rising oil prices on the international market on consumers, and the downward review of the Special Petroleum Tax (SPT) embedded in Ghana’s Petroleum Price Build-Up (PBU) could stop petrol price from jumping by over 38 percent to sell at Ghs5.25 per liter (equivalent to one U.S. Dollar) between January 2017 and June 2019.
The percentage increment of petrol over the past two-and-a-half years reflects largely the strengthening international refined oil and crude oil prices. However the depreciation of the local currency against the U.S. Dollar made matters worse for consumers.
The two graph shows that the prices of international oil prices and local prices track each other very closely over time; thus increases in crude oil prices are accompanied by increases in gasoline (petrol) prices on the international markets. Moreover, the quarterly changes in international gasoline prices and domestic gasoline prices are also very highly and positively correlated.
The persistent increases in fuel prices since 2017 has had motorists and commuters fuming, with the Chamber for Petroleum Consumers (COPEC) and the Industrial and Commercial Workers Union (ICU) embarking on a demonstration to protest what they called “hardship on the Ghanaian” last year.
While the news story of the “funeral criers” elicited laughter and jokes on social media, for an Accra UBER driver who has fuel to buy or a company that relies on thousand gallons of diesel for production purposes, a discussion on fuel price hikes is not a matter for laughter.
The price of fuel remains a significant determinant of domestic and global economic performance. And the consequences of fuel price increases are grave, as it affects the different macro-economic variables such as production cost, inflation, interest rates, employments, and freights. Hikes in prices of petrol and diesel directly and indirectly affect all the major sectors of an economy like agriculture, transportation, manufacturing and production. This in turn affects the prices of daily essential commodities which are transported, including the cost of food.
Motorists: A direct consequence of rising fuel prices is increase in what motorists spend on fuels every month for the same distance travelled. Back-of-the-envelope estimations show that a person driving 1050km per month in Accra is likely to notice monthly fuel bills in January 2019 go up by approximately Gh¢110 for a petrol car, compared to January 2017 (based on 42 kilometer per gallon journey). Those using vehicles with low carbon footprints are cushioned significantly compared to those with less efficient cars.
The stop-start technology found usually in modern upper-end vehicles, uses computers to sense when the car is in stationary position to shut down the engine, and reduce the consumption and emission of fuel.
Businesses: Higher fuel prices pushes freight cost up and increases production costs for especially businesses that uses fuel as a major input (like power utilities, farmers, and processing plants), and who mostly pass on the added costs to the final consumer. It literally means that prices of essential commodities like fruits and vegetables, as well as other goods and services will increase. And rising production costs also bites hard on products and services demand, business profitability, wages, and employment et cetera.
Public Transports and Commuters: Transport operators are the most exposed to fuel price increases as it remains a major input to their business.
In such a case, individual transport operators who continue to set their own prices in the absence of a single transport economic regulator, are forced to pass on the added cost to commuters in the form of increased fares, most often in a confused manner. The increased fares is also likely to lead to increased number of persons opting to walk or adopting other means of commuting, thus lowering the volume of people on the traditional transport system.
Households: Fuel price increases dents disposable incomes, by adding on to households budgets for not only fuels, but also transport fares and essential commodities and other goods/services like utilities and automobile. High fuel prices over a prolonged period may compel households to re-allocate resources by saving less or cutting down on expenses.
Inflation: If higher prices of goods and services last long, then it will have an inflationary effect. And the economic reaction to higher inflation may eventually result in increased interest rates. On the positive side, those with savings benefits from higher rates. But on the negative side, higher interest rates reduces disposable income of consumers as a result of higher debt service costs; leaving them with less to spend on other products and services.
Aside higher interest rates, prolonged inflation results in higher unemployment, higher utilities, currency depreciation, demand decline, tax revenue decline, and less real economic output; negatively affecting the overall economy.
As long as oil price remains a vital macroeconomic variable, higher prices might lead to significant damage on local economies, and on the global economy. To manage fuel prices and maintain economic progress on the local scale, government must re-invent the ways in which fuel demand is met, focusing largely on fuels from the local refinery (produced below import parity) than on imports. It may consider reviewing the taxes and levies on a liter of fuel, and also ensure that the local currency is strengthened against the major foreign currencies.
Written by Mikdad Mohammed, Institute for Energy Security (IES) ©2019
The writer is an enterprising energy policy researcher and analyst working with the Institute for Energy Security (IES) as a Senior Policy and Research Analyst. He has previously worked with the Bulk Oil Storage and Transportation Company (BOST) within the Corporate Communication section. He is an Alumnus of the University of Ghana. Nigeria Imports 5.61bn Litres Of Petrol In 3 Months
Nigeria’s National Bureau of Statistics has revealed that 5.61 billion litres of premium motor spirit (PMS) was imported into the country in the second quarter of 2019.
The NBS disclosed this in its “Petroleum Products Importation and Consumption (Truck Out) Statistics (Q2 2019)” report released on Monday in Abuja.
It said 1.38 billion litres of Automotive Gas Oil (AGO) and 131.36 million litres of aviation turbine kerosene (ATK) were also imported in the quarter.
About 12.22 million litres of Household Kerosene (HHK) were also imported during the period under review
This, however, represents a significant decrease when compared to the 43.79 million litres of HHK recorded in the second quarter of 2018
The report also said that 77.24 million litres of base oil, 41.79 million litres of bitumen, 27.68 million litres of low pour fuel oil (LPFO) and 354.70 million litres of Liquefied Petroleum Gas (LPG) were imported into the country in the second quarter of the year
“State-wide distribution of truck-out volume for the second quarter of 2019 showed that 5.18 billion of premium motor spirit, 1.28 billion litres of automotive gas oil (AGO) and 131.42 million litres of household kerosene (HHK) were distributed nationwide during the period under review,” it said
The report also said 176.14 million litres of aviation turbine kerosene (ATK) and 157.29 million of Liquefied Petroleum Gas (LPG) were distributed nationwide in the second quarter of 2019.
Lagos State got the highest share of LPG with a distribution of 27 million litres representing 17.32 per cent, followed by Rivers State, with 16.85 million litres of LPG representing 10.7 per cent of the share, and Delta State with 15.2 million litres representing 9.64 per cent of the total share of LPG
No LPG was recorded for Jigawa, Taraba and Yobe states.
Data is provided by the Petroleum Products and Pricing Regulatory Agency (PPPRA), before being verified and validated by the National Bureau of Statistics (NBS).
Source: shipsandports.com.ng