The country could be hit with fuel shortage as early as next week; a reason government must pay Bulk Oil Distribution Companies (BDCs) part of the GH₵1.8billion subsidy arrears even as Ernst and Young audits the claim, lobbyist for the Industry, Senyo Hossi, has said.
The audit is expected to take six weeks to complete but Mr Hossi said the fuel supply deficit is so dire that it cannot wait.
“I do not think the reports of pockets of shortages from the middle belt are a fluke. It is going to come down to the south very soon. I am sure from next week it should be bad,” Mr Hossi, who is CEO of the Ghana Chamber of Bulk Oil Distributors, told the B&FT.
“The stock situation from the National Petroleum Authority itself as at Friday was just 1.1 weeks of stock. And from our side it is much lower because we are really on the ground,” he said.
“There is urgency to the situation that has to be balanced with the need to audit — which we support wholeheartedly. But we can make payments on accounts to help the banks re-establish confidence in the industry and reactivate funding to it. So, at least, it is a sign of goodwill if you pay 50%; we will wait for the audit to end because you do not need all to get everything working. When we see you making payments, we know the rest will come after the audit. It could be 20% or 30% more or less. We can always work it out,” he added.
Government has tasked Ernst and Young to do an audit of the GH₵1.8billion subsidy claim by the BDCs, which includes not just price subsidies but forex exchange-differences.
“Our industry is so heavily woven with the entire financial sector; any shake-up can have some rippling effect within the entire economy. It is important this issue is addressed and the subsidy arrangement stopped,” he said.
Government, he said, needs to quit subsidising fuel evenly — which helps the rich — and invest the monies in mass transportation, which will create jobs and reduce fuel consumption per capita.
By introducing long commuter buses which can take more passengers, and reducing the number of trotros and taxis on the streets, the volumes of fuel consumed in the country will reduce, jobs will be created and the roads will be freer of traffic, he said.
“From 2011 to 2013 we spent US$1.2billion dollars in subsidies. Can you imagine what that could have done for mass transportation? And when you invest in mass transportation it is not consumption like fuel. It is an investment; you are creating jobs, and you are getting people to be more productive,” Mr Hossi told the B&FT.
“Our industry is US$4billion per year. It is largely import-dependent, and if US$4billion dollars is being shipped out of the economy every year when we can reduce it, why should we not do that? If we reduce our dependence on fuel alone, we have given the cedi a lot more breathing space. It will be better than what we are currently doing by suppressing the cedi and demanding more dollars for such imports,” he said.
Source by: Ghana/ Business & Financial Times