The Ghana Chamber of Bulk Oil Distributors (CBOD) is calling for fairness and non-discrimination in the administration and implementation of policy actions governing Forex Supply, Privileged Margins, Zonalisation and the use of industry infrastructure, among others.
When discriminatory policies and actions become rife, investor confidence dampens, Chief Executive Officer of the Chamber, Mr Senyo Hosi, has said.
His call comes in the wake of complaints by some BDCs that they are being discriminated against in the use of state infrastructure at the Tema Oil Refinery (TOR) and Bulk Oil Storage and Transportation Company (BOST), as well as the Bank of Ghana refusing to supply them with dollars, among others.
He explained that BDCs are not opposed to the use of parastatal companies to participate in the trade because as private players, they believe in competition with each other and with parastatal companies.
“We expect competition to be fair to all players,” he said.
According to him, the downstream sector makes very huge investments in the industry and employs tens of thousands.
Mr Hosi said operators are struggling to survive as a result of the legacy challenges from the regulated pricing regime.
He stated that the weight of legacy subsidies, in the range of about GH₵3 billion yet to be paid, has strained the ability of BDCs to access funding to compete and sustain operations effectively.
The compounding burden of interest expenses has reached unsustainable levels for our survival, he said.
He noted that Ghana is well positioned to become a refinery hub.
On petroleum pricing deregulation benefits, he stated that since government implemented the petroleum pricing deregulation regime, it has proven to be successful in terms of pricing, competition, fiscal benefits and service to consumers.
He said, as a matter of fact, prices have stayed lower than would have been under a regulated pricing regime, allowing savings of over GH₵150 million.
He said the deregulation policy has created a need for forex risk management tools.
“We believe that the size of the industry and the complications in its trade presents the nation with a unique opportunity to grow its derivative and secondary financial markets,” he said.
Mr Hosi expressed the hope that the Bank of Ghana would take policy actions that would encourage the development of an active derivative market.
“We remain willing to partner government in the development and implementation of policies to move Ghana forward.
“We have proven that given the chance and support, the Ghanaian can lead and drive industries. The indigenous captains of today have successfully co-existed and learnt from the multinationals. As we speak, the major industries in Ghana, except for the downstream petroleum industry, are mainly dominated by non-indigenous companies. Inasmuch as we ought to encourage investments into the country, it must be shaped to ensure that the Ghanaian at some stage will drive and lead these industries,” he said.
He backed the call for Ghanaians to patronise locally produced goods and services so the revenue can be reinvested and ensure true independence. Mr Hosi called for the inclusion of local players in major transactions because industry gets disillusioned when the “transactions occur without the consideration of the indigenous entrepreneur’s proven abilities.”
“The government, we believe, ought to be the most reliable supporter of our growth. The mid-stream era is here, and we urge Government to think of the Ghanaian entrepreneur first. Where we can, urge us on, where we are short of capacity, help us build them. A Ghanaian owned and led mid-stream industry will surely be a great legacy for Government. Just as we grew from the lower end of the downstream to dominate it, we can also grow from the downstream to dominate the upstream. Let’s continue to think the Ghanaian first,” he said.
He announced plans by the chamber to develop a new $40 million Single Point Mooring (SPM) facility in Tema in the next two years.
The SPM facilitates the convenient handling of large vessels, petroleum and oil products and will be the first privately owned facility of its kind in Ghana.
Tracing the recent history of the petroleum industry in Ghana, Mr Hosi said it commenced with indigenous entrepreneurs playing roles as agents, kerosene resellers and drivers.
He stated that the industry can now boast of oil marketing companies, bulk distribution companies, and storage and transportation companies who invest in infrastructure.
Ghana International Petroleum Conference (GhipCon) was recently held in Accra on the theme ‘The Changing Phase of Petroleum Repositioning Industry,’ which aimed to discuss and find solutions to challenges that negatively affect the performance of the petroleum sector.
It also seeks to deepen the constructive role of the mid and downstream sectors in the growth of the economy and to foster co-operation between stakeholders and policymakers.