Business News of 2014-08-20

Gov't releases Ghc25m to support premix supplies

The government has released GH¢25 million to cushion the company which supplies premix fuel to canoe fishermen in coastal areas.
It is also making strenuous efforts to release funds to Bulk Oil Distribution Companies (BDCs) to enable them to lift other petroleum products for the market.
In an interview with the Daily Graphic in Accra Monday, a Deputy Minister of Energy in charge of Petroleum, Mr Benjamin S.K. Dagadu, said the amount was to cater for subsidy on premix fuel, which he said “is the only product being subsidised now”.
“Arrangements are being made to release more funds to BDCs who lift gasoline and other petroleum products,” Mr Dagadu said, but declined to state the exact amount of money to be paid.
He said the audit being carried out by international audit firm Ernst and Young into claims submitted by BDCs was to cover only forex losses due to depreciation of the cedi.
Reacting to reports of diesel shortage, Mr Dagadu said “things would normalise before the close of work today because we have released 48.6 million litres of diesel to the market”.
That, he explained, was because four million litres of diesel had been sent to Kumasi for onward discharge to the Northern, Upper East and Upper West regions, as well as the northern part of the Western Region.
Greater Accra
The Deputy Minister said 34 million litres of diesel had been released from depots in Tema to parts of Accra, Eastern and Volta regions and parts of the Central Region.
“We have also directed oil marketing companies which have bigger stations outside Accra to directly lift the product from Kumasi for distribution to forestall any shortage,” Mr Dagadu noted.
The released stocks, he explained, were expected to last for a week, while the government made efforts to get more products released onto the market.
He said 10.6 million litres of diesel had also been transported to meet the demands of mines at Obuasi.
Premix released
The Tema Oil Refinery (TOR) on August 15, 2014, released 2,300 tonnes of premix fuel to alleviate looming shortage of the product, which powers outboard motors of canoe fishermen.
A total of 25 trucks were loaded with premix fuel at the loading gantry of the TOR for delivery to coastal regions and the Afram Plains.
The 2,300 tonnes is expected to meet a week’s demand for premix fuel.
To avert any shortage, TOR agreed to release 2,300 tonnes of premix fuel from its storage tanks to meet a week’s demand for the product.
Premix fuel is highly subsidised, resulting in the accumulation of a huge debt for the government, which has declined to pass on the debt to the consumer.
An industry source has stated that the company responsible for lifting premix fuel would need GH¢40 million to shore itself up to lift the product, but the government had indicated that it could only part with GH¢10 million.
Government debt
The government owes the BDCs GH¢1.3 billion, being losses incurred due to the depreciation of the cedi against the dollar.
Following the long queues recently recorded across the country as a result of fuel shortage, the government, on June 27, 2014, released GH¢450 million to settle part of its debts, while it engaged the international audit firm Ernst and Young to audit the claims submitted by the BDCs.
Source: graphic.com
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