GNPC SPEAKS OUT ON OIL SHORTAGE

The Ghana National Petroleum Corporation (GNPC) yesterday reacted to the criticism levelled against it by the Deputy Minister of Mines and Energy concerning the current shortage of fuel, especially gas oil in the country.

A statement signed by Mr Eric Cato-Browne, Executive Director(Marketing), said while the corporation regret the current shortage and is doing its best to help the Tema Oil Refinery to normalize the situation we do not believe that singling us out for blame represents a fair determination of matters which the Deputy stated that would be investigated fully.

The full text of the statement is as follows:

Since the announcement on 30th April,1997 by the Deputy Minister of Mines and Energy of an inquiry into the circumstances leading to the shortage of fuel, especially gasoil, in the country, we have been putting together a detailed dossier of events that the Corporation has been involved in concerning imports of petroleum products.

Surprisingly, we have just heard that a preliminary report has been submitted to the Ministry without any input from us, and without an opportunity for our side of the story to be heard. We are therefore compelled to make the following facts known. GNPC indeed won the tender of 18th March 1997 by the Tema Oil Refinery to supply petroleum products including gasoil. The first parcel of 30,000 metric tonnes was anticipated to be supplied between 7th and 9th April 1997 and GNPC accordingly began making arrangements for imports.

The Tema Oil Refinery was also required ot give a payment undertaking before loading and open a letter of credit at least 10 days before the vessel discharged. Unfortunately, the refinery was only able to establish the first letter of credit on 14th April 1997 meaning that the first intended dates could not be met.

GNPC nonetheless began to take steps to obtain the first cargo as soon as possible. Supplies were obtained from a Mobil oil refinery at Ravena in Italy. A vessel M/T Tomis West loaded on 2nd April and set sail for Ghana.

We were aware that another company had contracted to supply the Tema Oil Refinery two cargoes of gasoil which were delivered earlier in the year only to be rejected as not meeting the required specifications. The rejection of these cargoes by the refinery has been stated by the Tema Oil Refinery itself to be the origin of the reduction in their stock situation. No reference is made to this in the report that has just been publicized.

We realized after the rejection of the earlier cargoes, it was essential that we ensure that the specifications of the cargo we were supplying should be checked. We required this to be done while the vessel was on the high seas approaching Ghana. We found unfortunately that this cargo also did not meet the specifications. We too, had to reject the cargo and we notified the Tema Oil Refinery immediately.

Knowing that this situation would create problems we immediately began to work closely with the management of the Tema Oil Refinery to obtain immediately supplies to address the imminent crisis. At the same time we began to put pressure on Mobil to provide supplies that met the specifications.

An initial 5000 metric tonnes was obtained from Nigeria and more was to have been supplied but ethnic clashes in Warri,Nigeria made it impossible for other cargoes sourced from there to be brought in.

We assisted the Chief Executive of Tema Oil Refinery in contact with the Ivorian Refinery (SIR) to secure a cargo of 3000 tonnes from Abijan.

We have also in the meantime ensured that a cargo of 30,000 tonnes has set sail from Europe and will be delivered by 15th May on a vessel M/T "Sea Cross".

In the last month, I have personally been with the Chief Executive of Tema Oil Refinery on a daily basis updating him on all the efforts we were making to deal with the supply situation. We have been aware that our winning of the tender did not please many of our competitors, particularly those who seek high profit margins on imported products during the maintenance shut downs of the refinery. The lower prices we quoted were based on a realistic assessment of the market and with due consideration to the Ghanaian consumer. We know from our experience in the industry that we can deliver on those terms and indeed we are actually supplying at those prices. Some of the losers have been spreading it around that our prices were so low we would not be able to supply. From all indications, they have also sought to make their predictions true in some cases by interfering with supplies committed to us to meet our supply obligations. We believe it is in the country's interest that all these circumstances be fully ascertained during the proposed inquiry. Otherwise, the opportunity would be created for higher than necessary prices to be imposed on the country simply because the refinery is undergoing a maintenance turn-around. The oil market is notoriously subject to pressure from "big players" and before any body rushes to judgement on GNPC efforts to obtain a fair price for product imports, the facts must be assembled. That two reputable suppliers to whom the Tema Oil Refinery's specifications had been communicated, still supplied cargoes contary to the specifications should indeed be investigated and we are prepared to make available our doster of information for that purpose.

It is worth observing that in this period, GNPC also supplied cargoes of IPG at the prices we tendered. In the case of the first cargo, the refinery was now even able to receive it because of storage limitations. We had to divert the cargo elsewhere and re-supply later.

The Corporation has established a clear track record over more than a decade of meeting the entire petroleum products requirements of the country. We have Marketing Department that has experienced personnel involved in procurement of petroleum products.

Source: Ghanaian Times