Government, he said, is in the process of formulating policies aimed at nipping the situation in the bud once and for all.

Dr. Bawumia gave the assurance when he paid a working visit to the Western Naval Command at Sekondi on Thursday February 15, 2018.

According to the Vice President, the visit was to enable him understand the issues surrounding illegal bunkering and the smuggling of petroleum, as well as discuss the challenges of the Ghana Navy in the fight against the illegality.

He also took the opportunity to inspect a number of canoes specially modified by the illegal bunkerers to store petroleum products off-loaded at sea.

According to the Chief Executive of the National Petroleum Authority (NPA), Hassan Tampuli, some of the modified canoes can hold as much as 120,000 litres of fuel, enough to fill two-and-a-half bulk Haulage Vehicles popularly known as tankers.

Mr. Tampuli disclosed that nine persons had been arrested and handed over to the police while four tankers had been seized in recent months.

Speaking to the media after the visit, Vice President Bawumia said government was disturbed by the increasing reports of fuel smuggling, adding that Cabinet was considering various models to fight the canker, which has a direct effect on efforts to move Ghana beyond aid.

He expressed government’s determination to deal with the matter in a decisive manner, and warned those engaged in it to desist for their own good.

“We’ve had closed door discussions, and we’ve got some decisions that we’re going to take, and I believe that the task that President Nana Akufo-Addo has set for us, to try to understand this phenomenon and implement the policies that will stop it, I think it is a task that we are going to be very forcefully dealing with.

“I am leaving here quite well informed about the challenges, and have some good ideas about what we’re going to do. We will see the implementation soon.”

Vice President Bawumia also underscored government’s ongoing efforts to adequately equip the Navy, especially with patrol boats, to address the challenges outlined by the Commander of the Western Naval Command, Commodore Isaac Osei-Kuffuor.

The Vice President was accompanied by the Minister of Defence, Dominic Nitiwul; Minister for Fisheries Elizabeth Afoley Quaye; Chief of Naval Staff, Rear Admiral Peter Kofi Faidoo; Western Regional Minister Dr Kwaku Afriyie; Deputy Energy Minister and MP for Effia, Joseph Cudjoe; Deputy Minister for Aviation and MP for Takoradi, Kwabena Okyere Darko Mensah; MP for Sekondi, Andrew Mercer; Chief Executive Officer of the National Petroleum Authority Hassan Tampuli, and other government officials.

The Vice President later paid a courtesy call on the Paramount Chief of Essikado Traditional Area, Nana Kobina Nketsia V.

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By: citimonline.com/Ghana

The post We’ll deal with fuel smuggling – Bawumia appeared first on Citi 97.3 FM - Relevant Radio. Always.

The losses were recorded between May and July 2017 mainly because the oil wholesalers and retailers were forced to lower their margins due to the presence of smuggled products on the market which sell far lower than the market price, as they evade taxes on them.

According to the Ghana Chamber of Bulk Oil Distributors (CBOD) Pricing Analysis for the months of May to July 2017, premiums of BDCs fell drastically over the period under review compared to previous months.

“The BDC premiums for the three months averaged $6.5 per tonne for gasoline compared to $66.2 per tonne, and $30 per tonne for gas oil compared to $65.7 per tonne.

“This represents 90 per cent and 54 per cent drop in BDC premiums for gasoline from the 2017 first trimester position. It also marks 94 per cent and 73 per cent drops compared to the indicative NPA’s premiums of $112.17 per tonne,” the report noted.

It attributed the declining BDC premiums over the period to the unhealthy competition in the industry and the influx of illegal petroleum products (export dumping and inward smuggling).

“The dwindling premiums raise huge concerns over the commercial activities of the BDC trade and threaten the ability of BDCs to honour their financial obligations to their suppliers and banks,” the Pricing Analysis Report noted.

Chamber’s CEO

The Chief Executive Officer (CEO) of the BDCs, Mr Senyo Hosi, said the figure was likely to rise if the government, security services and other stakeholders did not take immediate steps to stop the illicit activities of fuel smugglers.

Already, Oil Marketing Companies (OMCs), including GOIL, Vivo (Shell), PUMA Energy, PETROSOL and ENGEN are posting millions of losses monthly, attributable to the unscrupulous activities.

The government would lose an estimated GH¢1.5 billion in revenue and taxes to illegal fuel trading activities in 2017 if the activities of culprits are not halted, industry watchers have warned.

NPA’s assurance

However, CEO of the National Petroleum Authority (NPA), Mr Hassan Tampuli, assured the BDCs, OMCs and other stakeholders of moves to resolve the issues.

In an interview with the Daily Graphic, Mr Tampuli declined to give further details on the next line of action with the explanation that “until we complete the sector agency’s consultation, it will be premature to give further details.”

Fuel prices 

The report further noted that GOIL, Vivo Energy (Shell) and Total sold their fuel at higher prices as compared to other OMCs in the country during the months under review.

The CBOD report said despite the increase in the fuel prices at the pump, the companies still increased their market shares from 43.28 per cent in 2016 to 45.09 per cent in 2017.

The increase in the market share of the three companies, the report noted, was due to the quality of service rendered by the cited companies.

“Their market share in 2017 increased from 43.28 per cent to 45.09 per cent. This suggests that consumer purchase decisions are increasingly being inspired by the quality of service and other factors and not just price,” the report noted.

The report noted that FRIMPS Oil, Glory Oil and PUMA Energy continued to top the OMCs with the lowest price on the market.

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Source: Graphic Online

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“Until somebody is arrested and processed and sent to prison this thing will never ever stop,” William Tewaih of Zen Petroleum said, during an interaction with the Energy Minister, Boakye Agyarko , organised by the National Petroleum Authority.

“We can talk about tracking devices and everything else, the contraband products will still go on because the bottom line is: there is a lot of money to be made in contraband products. Where there is money, people will be willing to take a risk. The only way you can stop it is to jail them…anything less than that, I do not believe anything will change,” William Tawaiah said to a loud applause from his industry peers.

A number of other attendees of the forum expressed similar sentiments, after the energy minister had outlined a number of measures government intended to take on the matter, and the general wellbeing of the downstream petroleum sector.

Both Bulk Oil Distribution Companies and Oil Marketing Companies have complained that aside resulting in revenue losses to the state, the smuggling of petroleum products in huge losses to them.

Chief Executive Officer of the Association of Oil Marketing Companies, Kwaku Agyeman Duah said the criminal activity resulted in a 15% loss of volumes to his members last year.

The OMCs have been threatening, since April this year, to lay off workers at their filling stations and other offices if the government did not do something about market.

The incentive for those who act in the black market lies in the fact that , due to ECOWAS protocols, products meant for Burkina Faso and Mali, mainly, do not attract levies, taxes and margins, which constitute up to 51% of the pump price of products sold locally.

By diverting such products back onto the Ghanaian market, therefore, illegal operators are able to sell at lower prices undercut genuine operators. Therein lies the problem.

The practice , the Energy Minister admitted has also created a huge compromise of the Petroleum Products Marking Scheme, which is intended to safeguard the quality products, since export products are not marked.

“The practice has created an artificial increase in export volumes. Export volumes for Diesel, especially grew by an astronomical 1829% from just above 10 million litres to over 196 million litres, while petrol grew by 102%,” Boakye Agayrko said.

“These volumes do not match the volumes recorded by the Malian and Burkinabe regulators as official imports from Ghana, confirming that most of these products do not reach the declared destinations.”

The Minister announced a number of measures government is rolling out, through the NPA, to check the criminality, including export and product quality guidelines, review of export licence requests and sanctions for stations that fail the market concentration test.

He also mentioned the ongoing amendment of the Petroleum Product Marking Scheme LI 2187, as well as increased collaboration with National Security and the Police Service as part of the measures.

Also, after a meeting on May 9, 2017 government’s Economic Management Team, decided that a number of measures be adopted to curb the dumping of products.

Key among these measures is a new directive that designates the Bolga depot of the Bulk Oil Storage and Transportation (BOST) as the sole export depot for the Northern sector, and its Accra plains depot as the sole export depot for the southern sector.

Reacting to the measures government is rolling out, Kwaku Agyeman Duah said: “ We said at the end of May [regarding the possible job cuts]. If by the end of May, the volumes are improving definitely the business person cannot lay the workers off, because he has trained them and he needs them. So if we see some appreciative volume increase, it helps all of us; government will get revenue, the business will stay and the employees will not be declared redundant.”

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Source: B&FT

The post Fuel smuggling won’t stop without sanctions – Oil Firms appeared first on Citi 97.3 FM - Relevant Radio. Always.