Monday, July 21, 2014

Do Politicians have a stake in BDCs?

Dr Mohammed Amin Adam
Dr Mohammed Amin Adam

THE Executive Director of African Centre for Energy Policy (ACEP),  Dr Mohammed Amin Adam has identified the lack of political will and commitment to solving the country’s Petroleum difficulties because of the strong conviction that some politicians have a stack in the Bulk Distribution Companies (BDC) otherwise why has it taken the Mahama administration too long a time to give the remaining $30 million to Tema Oil Refinery (TOR) for retooling he asked.

 He said retooling TOR is one surest way of solving the Petroleum downstream challenges the country faces that led to a week country-wide shortage of fuel last week. He said any scientific analysis of the situation on our hands has shown that Ghana losses more in terms of freight and insurance cover of finished products that are imported.

To this end ACEP support Government’s proposal of seeking collaboration between TOR and the Saudis in a joint venture arrangement.  This ACEP say will greatly increase the domestic sourcing of petroleum products and reduce the additional cost associated with importing petroleum products such as cost, insurance and freight charges.   ACEP also recommended that NPA should embark on aggressive demand management programmes particularly in Government, Ministries, Departments and Agencies  and closely work with  Customs and the Ministry of Transport to check inefficient vehicles importation.


ACEP say much as they understand the social implications of the a full deregulations, Government’s social interventions such as expanding the Metro Mass Transport, affordable health, access to education etc have been proven to significantly reduce the social impacts of market prices in many countries. Government should also expand the Livelihood Empowerment Against Poverty (LEAP) to support poor families.

Supported by Mr. Alfa Nasir and Benjamin Boachie, Dr Adam noted that a predetermined benchmark price could also be applied beyond which Government’s intervention is justified. During these times  tax reliefs on petroleum products could be applied, Price stabilization of a pesewa could be levy and invested in a stabilization fund  which could used in times of price volatilities.

Finally he suggested that Government must build a number of initiatives to inure public confidence in the administration of petroleum pricing which includes transparency such as publishing and making full disclosure of “accounts of all statutory levies on petroleum products and how funds are spent.  These include cross subsidization account, the Road fund account, the Energy fund account, the Exploration levy and Tor Debt Recovery levy.

He asked who knows whatever  amount of funds is in the various accounts, or how much has accumulated or how much is left in the various accounts. Good governance demands that tax payers be informed about all these developments for confidence sake. Just like the CEO of National Petroleum Authority (NPA) “Government must stop absorbing price increases for fear of political upheavals and seek a bi-partisan consensus on the petroleum pricing”. Dr Adam suggested.

By Seibik Bugri

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