The Bulk Oil Storage and Transport Company Limited (BOST) is reeling under massive debts, compelling it to run to the capital market to borrow a “whopping” $120,000.000.00, the Chamber of Petroleum Consumers Ghana has alleged.
The said amount, according to COPEC in a statement it issued on Thursday April 5, is being sourced from the Ghana Commercial Bank (GCB).
Last month BOST dominated the news headlines for all the wrong reasons after it was accused of illegally selling some 1.8 million barrels of crude oil at a discount leading to the loss of GH¢23million in revenue to the state. The transaction was between BOST, AOT and BB energy, according to COPEC.
“It thus comes as no surprise that BOST today is roaming, looking for a bailout of a sort after engaging in very questionable and highly suspicious transactions using the state bank-GCB for that loan,” the COPEC statement read in parts, adding: “BOST following from frustrations in accessing this money which most Ghanaians believe will go down the drain the exact same way it has handled its own capital assets over the past one year has openly accused the Finance Ministry of refusing to Grant an illegal waiver of the single obligor limit for them to access and chop as usual.”
Below is the full statement
DON’T LET BOST COLLAPSE GCB
The Bulk Oil Storage and Transportation after very desperate attempts to inform Ghanaians it has done all the right things for which no investigation is needed is on the capital market looking to borrow monies for its activities, with GCB and the Finance Ministry as the new targets.
BOST is on record to have indicated making a whooping profit of Ghc35million last year after trading.
One would expect such a company whose net capital less net operating expenses leaves a surplus or profit of over Ghc35million to be able to do either same volume of business if not more but BOST has not brought a single litre since the donkomi sale in September.
Sadly however the bad management decisions over the past one year has seen BOST not only lose its goodwill or operating capital but currently reeling under a lot of debts which has now forced it onto the capital market to borrow a whopping $120,000.000.00 (one hundred and twenty million dollars) from a single bank for operations.
BOST after incorporation in 1993 to hold strategic stocks and maintain fuel transportation systems for the country in recent times has added another mandate which is fuel trading to the original mandate.
The sad reality of what is happening at BOST today which has left them with only loses from fuel trading over the past year is the fact BOST doesn’t have any certified experienced fuel trader to help in that department and this has been amply reflected in the avoidable loses it has made over the past year.
BOST in March 2017 decided to take to the market some 5million litres of fuel that had been contaminated and which could be safely blended to be sold at optimum market of above Ghc4/litre, was rather being sold or dumped and sold cheaply for Ghc1.20/litre thereby effectively throwing away almost Ghc3 on every single litre for 5 million litres.
Fast forward to September 2017 of same year and BOST through its bad management decisions, decides to offload another of its capital assets in crude to the tune of 1.8million litres then held at the Tema Oil Refinery to two companies, AOT and BB Energy.
It goes ahead to sell at a donkomi of a -$2/barrel to BB energy though it could have easily negotiated at a little above +$5/barrel considering the ancillary charges that had already been paid on the products In-tank, the rest of the 1.8 million barrels is then traded off to AOT on terms whose disclosure Ghanaians are yet to be provided or told.
In all, the people of Ghana are believed to have lost in excess of a minimum of $5million through this single transaction which has been referred to the Office of the Special Prosecutor for investigations due to possible financial losses and legal breaches.
It thus comes as no surprise that BOST today is roaming, looking for a bailout of a sort after engaging in very questionable and highly suspicious transactions using the state bank-GCB for that loan.
BOST following from frustrations in accessing this money which most Ghanaians believe will go down the drain the exact same way it has handled its own capital assets over the past one year has openly accused the Finance Ministry of refusing to Grant an illegal waiver of the single obligor limit for them to access and chop as usual.
Whiles waiting on the Office of the Special Prosecutor, the Auditor General and the Parliamentary Select Committee on Mines and Energy to comprehensively probe the current ailing situation at BOST to institutionally reform and correct the rot going at BOST in order to bring it to profitability, we will to encourage the President of the Republic to pay a particular attention to the way BOST is being run to the ground currently.
We are by this further encouraging also Authorities whose mandate it is to protect the public purse to strenuously audit BOST and its operations rather than adding on more debt to the ailing state owned BOST.
We believe the Finance Ministry will not be in a hurry to Grant any waiver to this deal of over Ghc 550 million that could potentially further harm the financial sector bearing in mind the collapse of a number of banks in recent times.