The National Petroleum Authority (NPA) has said that per its calculations, the directive to Oil Marketing Companies to increase the Bulk Oil Storage and Transport (BOST) margin on petroleum products from 3 pesewas to 6 pesewas effective June 1 will not increase the cost of petroleum products beyond 0.5 percent.
According to the NPA’s Chief Executive Officer, Hassan Tampuli, the decision was carefully reached to ensure that BOST gets more revenue to maintain infrastructure and enhance its operations as well as not put pressure on the public – especially in these difficult economic times of COVID-19.
“The price of petroleum products will not go beyond 0.5 percent; that is less than 1 percent,” Mr. Tampuli said at the opening of the National Information and Research Centre of the Information Service Department, thus debunking reports that the price of petroleum product would increase 100 percent because of BOST margins.
Mr. Tampuli noted that it has become necessary to increase the margin because BOST is a strategic national asset that has the responsibility to hold and distribute products so that for every Ghanaian, wherever they find themselves in the country, the price paid for the product in Accra is the same price paid in any part of the country.
“BOST has an obligation to move volumes from different locations, from the coastal depots to the inland depots, through pipelines and through BRVs. To give you one good example, the storage infrastructure that we have in Bolga, 46 million litres, is almost the same storage capacity for the whole of Mali – just one storage infrastructure that we have in Bolgatanga.
“It takes money to repair and maintain, so that it doesn’t come to a stage where it has to collapse so have we go through the process of rebuilding the whole infrastructure. This is a national asset, and even in our homes we maintain them. We are supporting a national asset; it is not coming to the Ministry of Information or Ministry of Finance, it is to support BOST,” he added.
The NPA in 2019 was forced to abandon a similar move, after it emerged that the necessary legal backing and approvals were not finalised before the said communication was made to increase the margin from 3 to 6 pesewas. BOST recently began a campaign making a strong case for the margin to be increased because the current levy was not adequate, maintaining that it was needed to improve the company’s infrastructure.
Managing Director, Edwin Provencal, has been championing this, and made a strong case at a recent engagement with some civil society organisations in the energy sector and a cross-section of the media in Tema.