Business News of 2014-04-07

Bulk oil distributors petition government to stop BOST-TSL deal

The Ghana Chamber of Bulk Oil distributors is asking President Mahama to intervene and get the Bulk Oil Storage and Transport Company (BOST) to suspend the contract outsourcing the management of its petroleum storage facilities within the Accra Plains Depot, to TSL logistics Ghana Ltd, a Ghanaian subsidiary of a Nigerian-owned and based TSL Logistics Limited.

In a petition copied to the Chief of Staff and the Minister of Energy, the association said BOST’s intention to outsource the management of its tank farm to TSL, owned by Jide Tinubu, the younger brother of Wale Tinubu, CEO of Oando, is a slap in the face of President Mahama’s clarion call for Ghanaians to be placed at the centre of the economy’s development.

The Bulk oil distributors say, although they petitioned the Minister and Board Chairman of BOST one clear week before the signing of the TSL contract, they [Energy Minister and Board Chairman of BOST] failed to respond to their petition and went ahead to execute a contract which they say will not bode well for Ghana.

According to the Bulk Oil Distributors, the deal violates Ghana’s local content laws and is sure to cede control of a strategic national resource, to a Nigerian-owned company, pointing out the potential risks in the event of a major dispute with Nigeria, with the example of the shortfall in supply of gas through the West Africa Gas Pipeline.

In their view the deal was part of a grand scheme to have TSL and their trading partners control the Ghana & Sahelian oil trade.

The Bulk Distribution Companies (BDCs) say they “have earned the right to be given priority consideration in utilizing the opportunity to turn around BOST and facilitate the oil trade locally and in the Sahelian market” and are “willing through a consortium to take advantage of the opportunity BOST offers for mutual benefit and in the interest of the economy.”

The Bulk Distribution Company’s (BDCs) function was established under the National Petroleum Authority (NPA) Act 691 (2005) to encourage local participation and investment in the oil downstream sector, in line with government policy set in the late 1990s, to deregulate the petroleum industry.

Consequent to the deregulation policy, BDCs have invested over $180m in the construction and operation of tank farms with a combined capacity in excess of 250million litres.

Additional investments are on-going to increase private capacity to over 350 million litres.