Review proposal to make BEST sole off-taker of Sentuo Oil – Chamber of Bulk Oil Distributors to Bawumia

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The Ghana Chamber of Bulk Oil Distributors (CBOD) has objected to the government’s decision to make Bulk Energy Storage and Transportation (BEST), formerly BOST, the sole off-taker of Sentuo Oil Refinery Limited’s petroleum products under the gold for oil (G4O) programme.

In a statement dated Thursday, April 25, the chamber called on the Vice President and chairman of the Economic Management Team (EMT), Dr. Mahamudu Bawumia, to “review the proposal”.

CBOD maintained that the policy proposal contradicts the government’s mantra of fostering private sector involvement in the industry and undermines the petroleum deregulation policy efforts, which are working perfectly.

Furthermore, the chamber stressed that by sidelining Bulk Oil Import, Distribution, and Export Companies (BIDECs), the government risks stifling competition and hindering the growth of a vibrant private sector within this essential industry.

“We are convinced that this plan is inconsistent with the deregulation policy that guides the activities of the petroleum downstream sector.

“We are informed that the plan has been necessitated by government’s aim to control the exchange rate by indirectly ceding Sentuo Oil Refinery’s cedi liquidity through BEST for the latter to manage USD allocations under the G40 programme,” it said.

The statement further said, “We object to this proposal and respectfully appeal to the Head of the Economic Management Team (EMT), the Vice President, Dr. Alhaji Mahamadu Bawumia, to review this proposal.”

“Providing the needed USD liquidity under the G40 programme can still be achieved without necessarily anchoring the entire output of Sentuo Oil Refinery Limited (SORL) with BEST, formerly known as Bulk Oil Storage and Transportation Company (BOST),” it explained.

According to the chamber, the policy proposal would create “market challenges and deficiencies,” which will, “in the medium- to long-term, inevitably cripple the downstream sector.”

“CBOD ardently opposes this proposal,” the statement emphasised.

Concerns about petroleum product price hikes?

The chamber further asserted that should the policy proposal be implemented, it would create a monopoly in the petroleum sector.

It explained that the situation would deny consumers the benefits of lower prices.

“The government risks creating a monopolistic market which will negatively impact the downstream sector and the fuel-consuming public at large.

“The G40 programme has nearly given 50% control of the market to BEST whereas Sentuo production accounts for 20% of the market needs.

CBOD underscored that having a single player control such a “monumental share of the market will rob the market of the benefits of efficiency, lower prices and growing local market expertise that the deregulation policy has occasioned.”

The chamber, therefore, urged the government to “reconsider this position and establish a framework that encourages active participation for all players.”