Civil Society Organizations, Chamber of Petroleum Consumers (COPEC), and the Institute of Energy Security (IES), have backed calls from the Bulk Oil Storage and Transportation Company (BOST) for an increase in the BOST Margin in the petroleum price build-up from 3 pesewas to 12 pesewas.
According to them, if the Margin is increased, BOST can be in a position to hedge its prices to ensure stability in fuel prices in the country.
BOST MD, Edwin Provencal, says the current margin is not enough to put the company in a strategic position to fix its equipment which are archaic.
Speaking to Citi Business News, Executive Director of COPEC, Duncan Amoah explained that if the margin is increased, the continuous increase in fuel prices would be managed.
“The only assurance we need is that whatever additional resource that government would have to pump in, is needed in 6 months or 1 year from now. If we were to come back here to do this field trip or visit, the story here would be different. Where you would not find either of the tanks rusting or decommissioned. The pipelines that should have been upgraded to about 12 inches, are still doing 6 and 8 inches. That means that your flow rate is going to be quite low and that means you will lose all the competitive edge that you would have had in the downstream,”he stated.
“We are tempted to say that the new BOST agenda that the new MD is introducing could go far on condition that he will do as he says, on condition that other politicians will stay away and allow him the free hand to operate professionally. We have said that once BOST is sound, the incessant increase in fuel prices that we witness on Friday, Saturday, Sunday, and even on public holidays would be managed. As a country this is the best company in Ghana that can hedge,” he added.
Executive Director for the Institute of Energy Security, IES, Paa Kwesi Anamuah Sakyi also urged government to divert the price stabilization levy to BOST.
“If they mean what they say, it would be a good call for all Ghanaians to support. One other thing we have come to realize as a Civil Society Organization from the desk of IES is that, the price stabilization recovery levy has not been able to stabilize prices for us. The low prices we see today is just coming from the gains we have gotten from the world market, and so we may consider or government can consider diverting this price stabilization recovery levy to BOST, so that they can have enough funds to procure fuel, maintain their tanks and store enough fuel to manage both supply and price risk.”
About BOST margin
BOST Margin is a tax imposed on petroleum products used to cover the maintenance and operating cost of petroleum product depots and undertaking expansion programs at depots.
The BOST Margin has remained at 3 pesewas per litre since 2011.
In December 2019, it almost went up to 6 pesewas per litre but the decision was quickly reversed following intense pressure on government by opposition parties as well as CSOs such as the Chamber of Petroleum Consumers (COPEC).
BOST was incorporated in December 1993 as a private limited liability company under the Companies Act,1963 (Act 179) with the Government of Ghana as the sole shareholder.
Its duties are to among other things to develop a network of storage tanks, pipelines and other bulk transportation infrastructure throughout the country, rent or lease out part of the storage facilities to enable it generate income as well as keep strategic reserve stocks for Ghana.
It currently has six petroleum demand strategic zones and manages depots located in Accra Plains, Kumasi, Buipe, Bolgatanga, Akosombo and Mami Water with total capacity 425,600 m3.