Accra, Sept 20, GNA – The Government has
ordered forensic audit into the operations of the Bulk Oil Storage and
Transport Company (BOST) from the year 2013 to 2018.
Mr John-Peter Amewu, Minister of Energy, said
this had been necessitated by the financial recklessness uncovered by a
Presidential Committee tasked to look at the financial position of the company.
The Committee recently presented its report
which spoke of the poor state of the company’s finances and blamed this on
financial indiscipline and recklessness.
It cited the unprofitable tolling arrangement
with the Tema Oil Refinery (TOR) Limited between year 2015 and 2016, under
which the refinery processed crude oil on behalf of BOST at a fee
Mr Amewu told a press briefing in Accra,
attended by Mr. Kojo Oppong Nkrumah, the Information Minister designate that
per the arrangement, BOST procured its own crude oil and shipped it to the
refinery for processing into refined petroleum products – gasoil, gasoline, LPG
and then sold the products to the domestic and export markets.
He said the tolling of US$5.5 per metric tonne
(M/T) was on the high side compared to the international average tolling fee of
US$3.5 per MT.
Added to this was the higher than normal
imported crude oil premium.
Mr. Amewu said the cost of processing the
crude oil with all associated expenses in its procurements did not make the
He added that during the tolling arrangement
with TOR, yields received from the processed crude oil were lower than
expected, thereby the sales (Gross Product Worth) from the refined products was
far less than the cost of crude oil purchased.
The company therefore incurred losses from
Again because of the BOST/TOR alliance, some
traders dealing with BOST were deducting some of TOR’S old liabilities from
proceeds of the exports BOST undertook during the period.
Mr. Amewu also spoke of trade losses resulting
from under-recoveries and said it had a take or pay agreement with Trafigura
and other traders, which far exceeded BOST’S capacity to sell to the market.
The net effect was that in times of price
drops BOST incurred far more losses because it always held high stocks of
petroleum products in its storage facilities, creating under-recoveries.
He touched on repayments of existing loans
from trade receivables and said funds expected to be used for payment of
product purchasers were used to repay loans.
BOST overheads were paid from trade
receivables due to insufficient funds from its margin.
Mr Amewu said about 60 per cent of the funds
from BOST margin payments was pledged for the repayment of the Standard
Chartered Bank loan, adding that it was using part of its trade receivable to
fund its daily operations (overhead cost of about GH¢300 million per annum).
This situation created a hole in its trade
Recent payments to Springfield Energy Limited,
was one of many claims made by 16 Bulk Distribution Companies (BDCs) to BOST
for product losses occurring between 2013 and 2016.
He said the total claims on BOST in respect of
product losses by BDCs amounted to U$44 million.
The causes of such product losses needed to be
established to determine records of the storage of those products, those
responsible for loading the products, the financial receipts in respect of the products
and utilization of the funds.
He said since 2013, BOST had been faced with
serious financial crises due to mounting debts and financial indiscipline.