Bulk Oil Distributors (BDCs) in Ghana have ruled out any positive effect of the payment of government’s outstanding debts owed them, on the prices of petroleum products.
According to the oil distributors, the amount expected to be paid by government fall within the existing pricing structure which will have no significant impact on prices.
“All the solutions being proffered now are within the existing pricing structure; there will be no changes to the price because of the solution,” the Chief Executive Officer of the Chamber of Bulk Oil Distributors, Senyo Hosi said in an interview with Citi Business News.
Government has demonstrated its commitment to pay the over 2 billion cedis debt it owes the BDCs by the end of June 2016.
The assurance also follows the payment of about 600 million cedis of the debt in January this year.
Speaking to Citi Business News on the progress made so far, the Chief Executive Officer of the Chamber of Bulk Oil Distributors, Senyo Hosi was optimistic of the June time line.
“The commitment of government has been fantastic for the past few weeks and the structure we are looking at is standard and more practicable to the current situation. The efforts are being led by the Central Bank Governor and the Minister of Finance with the support of the Vice President to bring this to a close,” he stated.
He added, “We have had a lot of deliberations and there is a legal structure that has to be followed, it would be worked on and we hope that by the end of June, all these would have been brought to a close.”
The accumulated debts have also affected the balance books of most commercial banks in the country.
The development was reported to have contributed significantly to the Non-Performing Loan (NPL) portfolio of the commercial banks.
It also significantly affected the ability of the commercial banks to offer credit facilities to businesses and individuals.
But Mr. Hosi is hopeful the commitment so far expressed by the government will avert the recurrence of the economic implications while giving commercial banks a respite.
“The implications of the debt are already known and everybody wants to take it seriously so that it doesn’t get quite negative on the entire economy,” he further observed.