NPA Ask For Tema Oil Refinery Privatization.

Alex Mould – CEO of National Petroleum Authority

http://www.spyghana.com/npa-ask-for-tema-oil-refinery-privatization/

By Daily Guide Ghana

 

Alex Kofi Mould, Chief Executive Officer (CEO) of National Petroleum Authority (NPA), says until Tema Oil Refinery (TOR) is privatized or sold to private investors, it cannot perform to expectation, let alone compete internationally.

 

According to him, government currently does not have the money to invest into TOR and therefore it would be appropriate if the current managers of the economy allow investors to take over the state refinery.

 

Speaking recently at a presentation on opportunities for bulk distribution companies in Accra, Mr. Mould stated: “TOR is a huge organisation that needs a lot of money to maintain and also keep a standard to be able to compete with the international market. Government, as a shareholder, should ensure that TOR is fit for growth.  And how Government looks for the money depends on Ghanaians.”

 

But analysts in Ghana’s petroleum sector have expressed different views, saying TOR would be bought by government officials as they have since the beginning of their tenure of office ‘given a dog a bad name to hang it.’

 

An analyst, who refused to be named, noted that “if government is saying that it cannot support TOR at this time, how can it ensure it is handled well when it is sold to investors?”

 

“It should invest into refinery if it can do it better and more efficiently than the private sector and ensure that there are cheaper products that are supplied consistently at the right time.  “If government cannot do that then we should encourage the private sector to come into that industry.

 

“We can do this by not protecting the government sectors and as such stifling the private sector from competition. Government should not allow its agencies to pay a different price on petroleum products while the private sector pays a different price. They should pay the same price, compete on a level field and ensure that any organization it invests in is fit for growth and can compete with the private sector.

 

Do we want the taxpayer to pay it or Government to go and borrow it or do, we want TOR as an organisation to stand alone and borrow and do it. As a shareholder, government needs to step up to that responsibility and spell out exactly how it wants to do it. That has nothing to do with NPA. The NPA’s job is to give licences out to anybody who wants to compete in this space – the supply and distribution chain of petroleum products- to ensure that the consumer receives quality products at the right price and also services that are given to the consumer, they should have choice.

 

Asked how margins are set on petroleum products in relation to what pertains in the developed world, Kofi Mould noted that the petroleum sector is a heavily private sector one.

 

“Although NPA is the government regulator, we did not compete with participants. We ensure that the framework is open to all and that those who can meet the standards have a fair playing field.

 

“We have to encourage people to invest and to do this, they have to be reasonable return. You cannot have 17 bulk distribution companies (BDCs) if the return is not good. Some are bound to wither away. Likewise we cannot have over 60 oil marketing companies if the return is not good. You can’t have over 2000 trucks moving products around the country with over 150 transporters in this sector if the margin is not good.

 

By Samuel Boadi