The Chamber of Bulk Oil Distributors (CBOD) strongly opposes the government’s suggestion to designate the Bulk Energy Storage and Transportation Company (BEST) as the exclusive off-taker for Sentuo Oil Refinery Limited’s output within the gold for oil programme (G4O).
According to government assertions, this proposal aims to regulate the exchange rate by indirectly channeling Sentuo Oil Refinery’s cedi liquidity through BEST to oversee USD allocations within the G4O programme.
However, industry stakeholders have expressed doubts about this proposal, with CBOD asserting that it contradicts the deregulation policy governing the petroleum downstream sector.
“We object to this proposal and respectfully appeal to the Head of the Economic Management Team (EMT), Vice President, Dr. Alhaji Mahamadu Bawumia, to review this proposal,” a statement issued by CBOD read.
“Providing the needed USD liquidity under the G4O 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),” the statement argued.
Additionally, the chamber argues that the government’s strategy may result in market obstacles and shortcomings, potentially impeding the downstream sector’s development in the medium to long run. Moreover, it warns that by excluding Bulk Oil Import, Distribution, and Export Companies (BIDECs), the government could suppress private sector engagement, leading to a monopolized market that is detrimental to consumers.
“The G4O programme has nearly given 50 percent control of the market to BEST whereas Sentuo production accounts for 20 percent of the market needs. Having a single player control such a monumental share of the market will rob the market of the benefits of the efficiency, lower prices and growing local market expertise that the deregulation policy has occasioned,” CBOD stated.
In contrast, CBOD called on the government to create a framework promoting fair market practices, transparency, and inclusive engagement of all stakeholders.
The declaration highlighted the significant role of BIDECs in national progress, such as ensuring energy security during crucial periods and investing in storage infrastructure. It concluded by reiterating the Chamber’s dedication to collaborating with the government to establish a viable G4O framework that encourages innovation, sustainability, and efficiency within the downstream petroleum sector.