Managing Director of Bulk Oil Storage & Transportation Company Limited (BOST), Edwin Provencal, has called on government to approve the implementation of the adjusted BOST margin levy of GH¢0.03 per litre to GH¢0.12 to ensure efficient running of the organization.
He explained that the current BOST margin of GH¢0.03, which was implemented in 2011 has not seen any adjustments even though parliament ratified in 2017 that it should be increased to GH¢0.06.
In an interview with the B&FT, he said: “In 2011, the BOST margin was given to us at 3 pesewas. We are in 2020, some 9 years down the line where the dollar value has depreciated but we are still getting the same 3 pesewas. That is why the infrastructure is falling apart.
“In 2011, GH¢0.03 pesewas was equivalent to US$0.0183 and today the margin is still GH¢0.03 pesewas but the dollar value is US$0.0005 which is a loss of about 75 percent of its value. This simply means that what the BOST margin could do nine years ago, today it can do only 25 percent of that.”
He noted that the company needs more revenue to bring in more products, build infrastructure and trade, among others.
Mr. Provencal added that the motive is to be able to generate enough Internally Generated Fund (IGF) to enable BOST to pay dividend to the shareholder which is the country as well as promote the provision of affordable energy to reduce the cost of electricity in the near future.
“BOST is currently not able to fully fulfill its mandate due to its inability to bring in petroleum products at a competitive price that will enable it to control and influence the market price. The company has 51 petroleum storage tanks across the country, out of which 15 have been decommissioned as a result of malfunctioning components and also 86 kilometers (km) out of its 361km of pipeline infrastructure is inactive.
I have only 20 percent of my assets earning revenue and we need to bring back at least 70 percent in order to make money for us so our assets don’t rot. The first and most important one is the BOST margin solely for BOST infrastructure,” he said.
On his part, the Executive Director of Africa Centre for Energy Policy, Benjamin Boakye said ultimately, there is the need to put in more money with a more defined governance arrangements and monitoring system because “it is for our benefit that it functions.” He said the debate has never been whether BOST requires more money for investment but of how efficient and judicious those monies will be used.
“The challenge we have had as civil society and as a people in terms of monitoring the space is of how BOST has been defined over the period. It has been defined as a set up where revenue management is poor. So we need more assurance that when they are given the revenue, they can account for it. The ordinary people struggle each day to get a litre of petrol. So, even though there is assurance now, we need a stronger assurance that we will get value for the money spent without operating below capacity,” he added.