Business News of 2014-08-16

Banks blamed for nationwide diesel shortage

The National Petroleum Authority (NPA) has attributed the current shortage of diesel across the country to a hold on stocks by banks providing lines of credit to Bulk Oil Distribution Companies (BDCs).

The hold on the products stems from government’s indebtedness of a disputed amount of 1.35billion cedis to the BDCs.

Public Relations Officer of the National Petroleum Authority, Yaro Kasambata speaking to Citi Business News said “the BDCs and the banks still have liquidity challenges and that has accounted for the shortage of diesel in some parts of the country”.

According to Yaro Kasambata, “we have diesel in the country. Because of the challenge the BDCs have with the banks, the products are on some financial hold. We understand that is being worked on and the products will be made available.”

“It’s just a matter of hours. If this is resolved, stocks will permeate to the parts of the country where supply is short”, he emphasised.

Yaro Kasambata however said he is “unable to tell when the products will be made available because this is a pure commercial arrangement between the banks and the BDCs. I am not privy to that arrangement”

Meanwhile the same banks have also been accused of not cooperating with the appointed audit firm Ernst and Young to ascertain exactly how much is owed the BDCs by government.

Ernst and Young is expected to have produced the audit report by the end of July, but has not been able to do so.

Chief Executive Officer of the Association Bulk Oil Distribution companies, Senyo Hosi indicates “they have been unable to finish their report because of some lack of cooperation from some of the banks”.

It is however unknown the reasons why there has not been the expected cooperation between the two parties.

Senyo Hosi however edged “the banks to grant Ernst and Young cooperation because it is urgent”.

The Chamber of BDCs boss reemphasised the need for the audit.

According to him “with that debt of that magnitude, it is important, it is well verified because the volume of that debt may not be as big as it should be because of some inefficiencies on the side of the banks, BDCs or government.”

“The debts should only be paid for inefficiencies resulting from government. But if there are inefficiencies on the side of the banks, it will be unfair for the banks to push that to the government through the BDC, or vice versa”, he said.

“The exact clarity on what portion is purely government responsibility has to be established”, he emphasised.

Source: Citifmonline.com
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