General News of 2014-06-17

BDCs: Fuel shortage to hit Ghana soon

The Chamber of Bulk Oil distribution Companies is warning of an imminent shortage of petroleum products in Ghana.

According to the chamber, they will soon not be able to supply petroleum products because government has not paid the over Ghc1.5 billion due the bulk oil distribution companies (BDCs) from subsidies.

They say their banks have denied them lines of credit because of the rising debt level.

Fuel prices were maintained after the national petroleum authority reviewed them on Monday.

The Chief Executive Officer of the Chamber, Senyo Hosi, told Citi News an estimated Ghc40 million will be spent on this subsidy.

He disclosed that “in the past year, we have managed to keep the level of stock very reasonable. We have had strategic stock up to about four weeks and even sometimes for about 6 weeks- enough stock that is accessible. As we speak, we have less than two weeks stock. In my estimation, that should be about 1.3 weeks. When you are at that level, there is one thing in your face- queues and shortages.”

Senyo Hosi clarified that “it is not because BDCs do not want to import, but because those who fund BDCs find our transactions so risky because subsidies are sucking a lot of liquidity from the industry.”

The chamber of BDCs CEO called for the full implementation of the automatic adjustment without interference.

“It is important that as politicians, as a people, we are honest about petrol pricing. No politician has control about petrol pricing. Those days are over”

Petrol is still going for Ghc2.73pesewas per litre, diesel Ghc2.68 pesewas, kerosene Ghc2.61 pesewas, premix Ghc1.25 pesewas while liquefied petroleum gas is at Ghc2.87 pesewas per kilogram.

The last time the prices changed was on April 16 when diesel fell by about 4 percent.

Government has so far spent about GHC 175million in the past 8 weeks on price subsidies.

It is unclear how government expects to fund this as it has not been provided for in the 2014 budget.