CBOD not opposed to government’s gold for oil programme

June 10, 2024
CBOD not opposed to government’s gold for oil programme

The Ghana Chamber of Bulk Oil Distributors (CBOD) has said it is not in any way opposed to government's programme.

Its Chief Executive Officer, Dr. Patrick Ofori, explained that the Chamber is also not against involvement of the Bulk Oil Storage and Transportation Company (BOST) in managing strategic petroleum stocks within the downstream petroleum sector.

He said CBOD is however advocating a level playing field where BOST, in particular, is not singled out for preferential treatment that gives them an unfair advantage over other bulk distribution companies.

“What we are saying is that they should create an enabling environment for everybody to compete fairly and on their own strength,” Dr. Ofori said in an interview.

“We don't want a situation where laycans [the schedule for berthing petroleum-carrying vessels at the ports] are skewed in favour of BOST. If BOST is ready or intends to compete within the commercial space of product importation, they should do so on the strength of their balance sheet; and they should be able to raise letters of credit to conduct their commercial activities.

“If their internal structures and books are robust enough, they should be able to lure the international oil trading companies to access lines of open credit for them to be able to participate fairly, effectively and efficiently. But they should not be protected using state entities and in the end try and claim efficiency based on state steroids,” he said.

Dr. Ofori warned that the preferential treatment BOST is receiving in the form of skewed laycans and forex allocation could distort the markets, potentially imposing a financial burden on an already stressed economy and future additional petroleum taxes similar to ESLA and TOR levy.

“What we are speaking against is the central bank underwriting the risks associated with BOST's commercial activities,” he said.

“Over the years, was brought in to support BOST. That didn't end so well. And before G4O [Gold for Oil], some BDCs were also even complaining about products that they put through the BOST system which they struggled to account for. Inspection companies are complaining about transmission losses which are above normal when products are going to BOST facilities. These are our concerns that we are raising.”

Dr. Ofori pointed out that CBOD is pushing for a level playing field that will help ensure sustainability and profitability of the downstream petroleum sector as well as safeguard Ghana's energy efficiency and security.

“We are not against G4O. Neither are we against BOST engaging in their core mandate of managing strategic petroleum stocks. But what we are pushing for is a level playing field for us to operate efficiently and carry out our businesses. After all, while our members pay US$300,000 as licencing fees, BOST doesn't pay any of those fees and levies,” he said.

“While each one of us is being levied BOST margin, no BDC is benefitting from that. In addition to all these privileges, if they are still going to skew a portion of the market that will allow BOST to bring in a certain percentage of products and enjoy preferential treatment with regard to laycan allocation and forex allocations, clearly it raises concerns. Then, it means the private sector is being unduly bullied and discriminated against,” he concluded.

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