Business News of 2014-07-02

TOR appeals to BoG to allow it to use forex locally

Workers of the Tema Oil Refinery (TOR) are demanding the withdrawal of the Bank of Ghana (BoG) directive prohibiting the use of foreign exchange for financial transactions locally.

According to the leaders of the workers union, not only is the ban having a severe impact on the acquisition of letters of credit (LCs); but it has rendered the refinery redundant.

Crude Unavailability

Since February, this year, the refinery has not engaged in any productive activity due to the unavailability of crude oil. Thus, the workers have indicated their intention to embark on an industrial action over the government's inability to provide a respite for the company. They have therefore displayed red banners with the inscription, "We want crude oil" at the entrance of the refinery, to drum home their concerns.

The efforts of the refinery's management since February, this year, to engage BoG on many occasions to guarantee LCs for the purchase of crude oil have not yielded any fruitful results.

"TOR was unable to take delivery of one million barrels of crude oil valued at $150 million it imported into the country early this year due to its inability to secure LCs as a result of the BoG's directive", the Chairman of the Senior Staff Association of TOR, Mr Daniel Fugar, told the Daily Graphic in Tema yesterday.

The two vessels that ferried the consignment, according to Mr Fugar, remained on the high seas for months, attracting over $1 million in demurrage to TOR.

He said the BoG was able to facilitate LCs for the Volta River Authority (VRA) within the same period to take delivery of 200,000 barrels of crude oil from the consignment meant for TOR.

"TOR is not asking for money from the government to purchase crude oil, but rather asking for the window of the foreign exchange exemption to enable it to raise LCs to transact business with suppliers", Mr Fugar said.

Government's failure

Mr Fugar said the lack of support for TOR continued to have serious implications for industries that depended on it for fuel and he wondered why the government was hesitant to ensure that the BoG provided the refinery with the exemption.

"The government would have averted the recent threat by the Bulk Distribution Companies (BDCs) if it had empowered TOR to produce at full capacity", Mr Fugar said.

"The uncontrolled importation of petroleum products, which has further put pressure on the dollar against the cedi, would have also been firmly controlled if the refinery had been assisted to refine oil", he added.

OTC Licence

While calling on the government to account for the TOR Debt Recovery Levy, Mr Fugah appealed to the managers of the economy to ensure that money was transferred into TOR's accounts for it to pay its debtors and expand its capacity,

He also appealed to the National Petroleum Authority (NPA) to grant the refinery an Oil Trading Licence (OTC) to enable the refinery to import finished products to supplement its supply.

Source: graphic.com
« Previous | Next »
View Comments
Sponsor Links
News Categories
Site Menu