Some stakeholders have reacted to recent calls by the Bulk Oil Distribution company for a new levy to be introduced to help it improve upon the country’s current oil reserves.
According to BOST, the country has just about two weeks of reserves to serve the country hence its call.
The Bulk Oil Storage and Transportation Company Ltd (BOST) was established in 1993 under the Ministry of Energy and Petroleum responsible for the development of a network of storage tanks, pipelines and other bulk transportation infrastructure throughout the country and also to keep strategic reserve stocks of petroleum for Ghana.
But it appears it has a challenge keeping up with one of its mandates.
BOST MD, Edwin Provencal stated that “we have about two weeks [of reserve], but there is a key point here, even though we have two weeks I will not even term them as strategic reserves.”
The Institute for Energy Security, IES, believes the situation is graver than presented.
Nana Amoasi IV is its Executive Director, and he indicated that “Unless the definition of strategic fuel reserves has been modified to mean something else, the IES can boldly state that BOST doesn’t have a single day worth of petroleum product reserve.”
“A two-week petroleum product reserve means the company is holding volumes in excess of 200 million litres of just petrol and diesel.”
However, the BOST MD said a new levy will be required to improve the situation.
“As I speak to you, nobody pays for the strategic reserve. It’s been zeroed out in the price build-up, so even though we want to enjoy that public good called the strategic reserve, you and I are not paying for it today. So if we want to benefit from the strategic reserves, then we need to put in the strategic reserve levy that will now force BOST to keep six weeks of strategic reserves.”
But Nana Amoasi IV stressed that there are better approaches to addressing the issue.
“Levy is a lazy way of raising capital and that is what BOST has resorted to over the last 18 months. They have not found any innovative way of generating the required cash flow for their operations. Levying may not be the most sustainable way of living up to your mandate because it places extra burdens on citizens.”
The Chamber of Petroleum Consumers agreed with the position of the IES.
Duncan Amoah, its Executive Secretary added that “We do not think that the margins we contribute to BOST are only for maintaining their operations, we do expect BOST to keep a strategic stock. That is exactly what BOST has been set up to do for Ghanaians such that in times when world oil prices go higher than our pockets we should be able to fall on them.” Citi Business News