GHC14m lost to 'dirty' fuel deal - Minority

The Minority in Parliament has said the decision by the Bulk Oil Storage and Transportation Company Limited (BOST) to allow contaminated fuel to be sold on the market has cost the nation a financial loss of about GHS14.25million.

The Minority has, therefore, demanded that the said amount be retrieved by surcharging the culpable officials at BOST.

Former Petroleum Minister Emmanuel Armah-Kofi Buah said this at a press conference in Accra on Tuesday 27 June.

This comes on the heels of the Chamber of Petroleum Consumers, Ghana (COPEC-GH) warning the public to beware of the sale of contaminated fuel on the market. The group has also accused the Managing Director of BOST of allowing his “greed” to make him act “recklessly” by allowing the contaminated fuel to be sold onto the market.

According to COPEC-GH, about five million litres of the contaminated fuel have flooded the market and are being sold at the pumps.

In a press release, the Research, Pricing and Monitoring Officer at COPEC-GH, Mr Samson Addae, said: “One would have thought a company like BOST would at all times work with the public interest as the primary objective, but the selfish interests and greed of some management persons including the MD seem to have taken the best part in this cruel transaction without any proper prior or post-sale and discharge impact assessment done.”

However, BOST in a statement issued said the sale was the best of three options.

“The first option is to have a corrective treatment of the off-spec product at TOR but this option was, however, not possible because TOR is not refining at the moment.

“The second option was to gradually inject a total of about seventy thousand (70,000) litres of the off-spec product into ten million litres (10,000,000) of normal product over a period which will take about ten (10) solid months for BOST to accomplish. The implication of this option is, however, the opportunity cost of losing the commercial value of over five million and seven hundred thousand Ghana cedis (GHS 5,700,000). This arrangement would have deprived the BDCs of getting space to store their products. The capacity of the tank holding the off-spec product is twenty million litres (20,000,000l).

“The third option involves the selling of the off-spec product at a competitive ex-depot price. Comparatively, the possible revenue loss here cannot outweigh the loss in Option 1 and 2.

“Clearly, OPTION 3 was the ideal from a business point of view,” the statement said.

BOST also dismissed fears of losing revenue as a result of the GHS1 per litre price offered to Movenpina Energy for the contaminated fuel.

“BOST sold the off-spec product at one cedi, thirty pesewas (1.30p) per litre as against the normal ex-depot rate of one cedi, seventy-five pesewas (1.75p) for normal products, thus 26 per cent discount off the normal product and this is the normal and acceptable practice in the industry.

“The assertion that the off-spec product should have been sold at two cedis, fifty pesewas (2.50p) is misleading because ex-depot price and pump price are completely different. BOST only sells products at ex-depot rate,” the statement added.

“BOST’s responsibility is to sell off-spec products to a qualified company and it is important to note that off-spec products are used by the steel, garment, petrochemical companies to run their machinery and certainly not for the running of vehicle engines. It can also be used as mixture for asphalt and turpentine to prevent decay of wood, etc. and, therefore, cannot fathom how possible off-spec products could be sold to unsuspecting consumers for whatever reason.

“That notwithstanding, it is a fact that NPA is fully in control as usual and will not allow this to happen,” the company said. Read Full Story