Business News of 2014-07-25

Operational TOR will reduce fuel prices - Workers

Junior staff of the Tema Oil Refinery (TOR) have declared that Ghanaians are continuously paying more for petroleum products because of government’s decision to import finished products instead of allowing TOR to refine crude.
Addressing a press conference in Tema yesterday, Mr Samuel Boateng, secretary of the General Transport, Petroleum and Chemical Workers Union of TOR, said Ghanaians would be paying less for petroleum products if TOR was refining fuel.
“TOR can refine and meet the market demand of petroleum products of about 60%, but it is not allowed to work due to some policies by the government engineered through some of its agencies such as the National Petroleum Authority and the Bank of Ghana,” he stressed.
Mr Boateng, therefore, appealed to President John Mahama to save the refinery from collapse, adding that the refinery is bleeding with a daily loss of $350,000 due to the shutdown.
He said the Bank of Ghana (BoG) should, as a matter of urgency, grant letters to assure commercial banks that if letters of credit are raised for procurement of crude oil there would be foreign exchange available to pay for the crude oil.
He also mentioned that the Bank of Ghana should consider a waiver of the Single Obligor limit for TOR to enable banks to raise letters of credit (LC).
Mr Boateng said although TOR’s bankers were willing to raise the LCs, the limit put on LCs per BoG’s regulations made it difficult to raise money to buy the appropriate amounts of crude oil for the refinery.
He also stated that the Bank of Ghana should release the remaining US$37.7 million agreed for retooling of the plant for stability, increased reliability and profit enhancement.
He said the workers would take drastic actions if government fails to intervene to restore operations at the refinery.
He said just like the Bulk Oil Distributors (BDCs) held the nation to ransom due to government’s indebtedness by refusing to supply petroleum products to fuel stations, they may also have to take a similar step.
The general secretary of TUC, Mr Kofi Asamoah, also added that there has been 44% increment in fuel prices, and that has resulted in economic hardship.
He also stated that Thursday’s demonstration is not being organised out of mischief, but due to their constitutional right.
He further stressed that the government, through the Ministry of Labour and Employment, had appealed to them earlier that the said date for the demonstration will the second commemoration of the late President Mills so they should honour that date and postpone it to a different date, which they refused.
He concluded by appealing to government to halt the further depreciation of the cedi and take strong policy measures to ensure that TOR operates within full capacity.
The refinery’s Crude Distillation Unit (CDU) plant was shut down in 2011 due to TOR’s inability to obtain letters of credit (LCs) from its bankers to purchase crude oil for production.