Energy expert proposes partial privatization of TOR amidst leasing saga

An Energy Economist & Minerals Analyst, at the Africa Centre for Energy and Environmental Sustainability, Dr. Gideon Ofosu-Peasah, has proposed that one of the ways to get the Tema Oil Refinery back on its feet is to partially privatize it.

In the midst of growing concerns about TOR’S lease to a group named Torentco Asset Management, the analyst noted that even though privatization has a positive impact on the refinery, it may have some negative effects on per-unit costs and prices.

Speaking to GhanaWeb Business in an exclusive interview, he said: “Privatization has a noteworthy and positive impact on labor productivity and output, albeit with a detrimental effect on per-unit costs and prices.

“It enhances efficiency, minimizes political interference, incentivizes the adoption of new technology, boosts productivity, facilitates difficult decisions, reduces waste (including the dismissal of surplus workers), and fosters overall progress,” he said.

However, the refinery’s challenges which include debt, inefficient infrastructure for crude processing, transparency, and accountability issues among others, call for the need for robust corporate governance, holding both management and the Board of Directors accountable for inefficiencies and mismanagement.

Dr. Ofosu-Peasah said: “Addressing governance issues including extensive stakeholder consultation, transparency, and selection of private partner through an open and competitive bidding process is key.”

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