Oil: Govt settles US$806m forex debt losses

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 A TOTAL amount of US$806.25 million has been settled by government for Forex losses on oil incurred between 2011 and 2015, the Chamber of Bulk Oil Distributors (CBOD) has revealed in its 2019 Annual report.

According to the report, there was progress made on government’s legacy debt to Bulk Oil Distributing Companies (BDCs) with the payment of all outstanding principal sums of US$25.68 million and the validation of the interest components.  
Following an audit of the Forex Loss Under-recoveries Interest (FLURI) and Real Value Factor (RVF) claims by BDCs that commenced in 2018, the report noted that an additional US$174.08 million (GHC905.88 million) was validated and accepted by Government.
In respect of this, an amount of US$123.33 million (GH¢648.93mn) was paid by government in June 2019.
The report also noted that Ghana lost a total GH¢2.7 billion in taxes and regulatory margins for the period 2015 to 2018.
Breaking it down, it said total taxes evaded based on official unaccounted oil stocks stood at GH¢1.39 billion.
At the same time, total under-reported taxes based on official accounted sale volume after adjustments for exemptions stood at GH¢1.16 billion.
The country also lost GH¢231.53 million in regulatory margin.
The report emphasized that Ghana’s gross national consumption of oil reached 4.46 million metric tonnes in 2018.
A total of 3.73 million metric tonnes was however consumed by the non-power sector representing 83 percent of gross consumption while 738,076 metric tonnes, representing 17 percent was consumed by the power sector (fuel oil, crude oil and propane for power).
Out of a total of 165 registered Oil Marketing Companies (OMCs) and LPGMCs in 2018, 14 companies were inactive, 63 sold products above 10,000 metric tonnes while 88 sold volumes below 10,000 metric tonnes in 2018.
The top 25 percent (first quartile) LPGMCs/OMCs accounted for about 83.53 percent of the
total market share, the second quartile accounted for 11.36 percent while the 3rd and 4th quartiles accounted for 4.27 percent and 0.83 percent respectively.
The BDC market consolidated with the top 10 increasing their cumulative market share from
78.65 percent in 2017 to 80.13 percent in 2018. In a similar trend, the top 5 also increased their grip on the market from 56.94 percent in 2017 to 59.63 percent in 2018.
The Cylinder Circulation Model
The report explained that the proposed new LPG distribution model will begin with the Bulk BDCs.
They will either import or buy the LPG from local refineries or gas processing plants, such as Tema Oil Refinery and the Ghana National Gas Company and store the LPG in their Bulk Storage facility. The BDCs will then sell the LPG in bulk to either the Bottling Plant for the sole purpose of filling the empty cylinders.

By Augustine AMOAH

ABOUT: Nana Kwesi Coomson

[email protected]

An Entrepreneur, Corporate Communications Executive and Philanthropist. Editor-in-Chief of www.233times.com. A Senior Journalist with Ghanaian Chronicle Newspaper. An alumnus of Adisadel College where he read General Arts. He holds first degree in Bachelor of Arts from the University of Ghana; Political Science (major) and History (minor). In 2015, he won a £35,000 postgraduate scholarship to study MSc Corporate Social Responsibility (CSR) and Energy with Public Relations (PR) at the Robert Gordon University in the United Kingdom. He is a 2018 Mandela Washington Fellow who studied at Clark Atlanta University in USA on the Business and Entrepreneurship track. His mentors are Rupert Murdoch, Warren Buffet, Sam Jonah, Kwaku Sakyi Addo and Piers Morgan

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