AS of June 18, government’s indebtedness to the Bulk Oil Distribution Companies (BODCs) had reached about GH¢3.4 billion.
Speaking at a forum on the petroleum downstream sector, Chief Executive Officer of the Chamber of Bulk Oil Distribution Companies (CBOD), Senyo Hosi, said the estimated price under recoveries from April to June 2015, alone was GH¢233 million.
He said the debt represented foreign exchange under recoveries, price under recoveries and financing cost interest for bearing price under recoveries, also known as the real value factor.
He also stated that government’s indebtedness had affected their ability to secure loans from banks to import oil, and said “the BODCs are really suffering and now we have reached the point where if we don’t settle our debts to the banks, they will not issue us letters of credit to purchase fuel, and that could result in the shortage of petroleum products on the market soon”.
Mr. Hosi stated that government had presented about GH¢55milion as subsidies, which was not sustainable, and added that it was supposed to increase fuel by 17.5per cent and not 14 per cent as it had done.
The National Petroleum Authority (NPA) is putting in place procedures to allow the full deregulation of the market.
However, Mr. Hosi said the liberalisation of the pricing formula would only be an interim measure, and added that the price liberalisation would not bring petroleum prices down.
He held the believe that a more permanent solution for the challenge would be for government to put in measures to fix the macro-economic situation and strengthen the Cedi against the major trading currencies, since the exchange rate was an important factor of the pricing formula.
By Joy Addae-Madzi & Baaba Crentsil