Fuel shortage imminent due to govt’s indebtedness to bulk oil distributors

Government's GH¢1.8 billion indebtedness to bulk oil distribution

companies (BDCs) has taken a new dimension, with the potential to

negatively affect the supply of petroleum products across the country

in the coming weeks.

This is because international suppliers of petroleum products have put

under 'lock and key' one week's supply of petrol and diesel until the

BDCs honour their debt obligations to the suppliers.

To compound the problem, local banks have declined to issue letters of

credit (LCs) to the BDCs to pay off their debts to their international

suppliers because the current debt is threatening the survival of the


The Chief Executive Officer (CEO) of the Ghana Chamber of Bulk Oil

Distributors (CBOD Ghana), Mr Senyo Hosi, told the Daily Graphic in an

interview that the situation would create fuel shortages across the

country within a week if the government did not take immediate steps

to pay its debt to the BDCs.

However, a highly-placed government source, which acknowledged the

problems facing the BDCs, said the government and its agencies were in

talks with the companies to resolve the issue once and for all.

It said there was no cause for alarm because the situation would be

normalised in no time.

Audit of debt

Meanwhile, the government has tasked international audit firm, Ernst

and Young to, conduct an audit into the GH¢1.8 billion debt, being

subsidies on petrol and diesel from July 2011 to date.

It will take about six weeks for the audit to be completed, but Mr

Hosi indicated that the situation would get out of hand if the BDCs

had to wait for six weeks before discharging fuel products.

Welcoming the government's decision to audit the claims of the BDCs,

he said, "Since it will take six weeks to complete the audit,

vis-a-vis the urgency of the crisis we face, partial payment must be


"In principle, the parties, including the government, the National

Petroleum Authority (NPA), the BDCs and the banks, do agree that a

debt exists in some form," he said.

To establish "funding confidence in the industry", he suggested that

the government needed to make some payment to resuscitate the supply

of petroleum products to the market.

Stop subsidising

While indicating that fuel shortage was imminent, as a result of the

outstanding debt, Mr Hosi said there was no need for the government to

continue subsidising fuel products.

He said there was lack of clarity on the government's commitment to

honour its debt obligation, while it continued to subsidise fuel.

"When you continue to subsidise, you are digging a bigger hole because

you are increasing debt without clearing it. You don't solve a problem

by creating more problems," he said.

Meanwhile, there was fuel at filling stations in some parts of Accra,

in spite of speculations that fuel shortage will hit the country soon,

reports Seth J. Bokpe, ACCRA.

Out of the 16 fuel stations the Daily Graphic visited at Adabraka,

Kaneshie, Darkuman, Sakaman, the Kwame Nkrumah Circle, Odorkor, Osu

and along the Farrar Avenue, only two did not have diesel or petrol.

Attendants at the Sky Oil Filling Station at the Nkrumah Circle told

the Daily Graphic that the station had run out of petrol since last


And at the Total Filling Station near the Ghana Commercial Bank at

Circle, the attendant said the station ran out of diesel Friday.

However, at the Adabraka Total Filling Station, near the Roxy Cinema,

an attendant told the Daily Graphic that there was enough fuel to last

for even two weeks.

The story was different at the Shell Station near Abossey Okai where

the attendant said the station had taken delivery of fuel on Saturday.

At the Kaneshie-Odorkor GOIL Station, the attendants said they had

enough fuel to last until Tuesday but were not sure when the next

consignment would arrive.

At the Darkuman Total, the attendants said the last time the station

received fuel was 10 days ago.

"All we have heard are rumours of an impending fuel shortage, but we

have enough to go for a week or two," the attendants, who asked for

anonymity, said.

At the Sakaman GOIL and Shell stations, busy fuel attendants said the

two stations had enough fuel. They, too could not tell when their next

delivery would arrive, nor could they tell when what they had now

would finish.

It was the same story at OJK Oil and Darkuman GOIL, both at Darkuman,

and the Goil and Shell Filling stations at the Kwame Nkrumah Circle.

However, at the Accra Sports Stadium, an attendant said if the station

did not receive any fuel by Wednesday, then there would be shortage.

The last time fuel shortage hit Accra was January 27, this year.

Source: Graphic

Kofi Oppong Kyekyeku

I am a Ghanaian Broadcast Journalist/Writer who has an interest in General News, Sports, Entertainment, Health, Lifestyle and many more.

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