Business News of 2014-08-14

Looming fuel shortage: Gov’t to defray GH¢150m debt owed BDCs

Ghana’s government is planning on defraying GH¢150 million of a GH¢400 million debt owed the country’s bulk oil distributors to forestall another fuel crisis in the young oil-producing West African country.

StarrFMonline.com has learnt that major crude importers are unable to buy enough supplies of the product for distribution to retail outlets due to government’s indebtedness to them.

They are therefore unable to secure Letters of Credit from local banks, some of which are withdrawing their LCs due to lack of enough dollars in circulation.

Ghana’s Central Bank intends intervening to help the dollar circulation situation.

The two difficulties have conspired to frustrate operations of the Bulk Oil Distributing Companies (BDCs), some of which have run out of stock.

The rippling effect could be another fuel shortage, which will in turn spark another crisis, barely a month after the country emerged from a similar situation.

Some of the BDCs say although their major clients, including huge mining companies, are willing to pay the market price for the fuel products, especially diesel, there is inadequate supply to meet their needs.

They fear the shortage could have a knock-on effect on vital sectors of the economy that rely heavily on petroleum products.

Source: Starrfmonline.com
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