BOST to Keep Strategic Reserves of Six Weeks

BOST to Keep Strategic Reserves of Six Weeks

The government has indicated that it will assist the Bulk Oil Storage and Transportation (BOST) Limited in maintaining strategic stocks to ensure fuel security.

BOST is expected to maintain a strategic stock of not less than six weeks of national demand as part of its mandate.

However, the state-owned company is unable to fulfil this mandate due to a lack of resources, as the strategic stock levy was repealed in 2008 in order to reduce the cost of ex-pump prices for petroleum products.

Dr. Matthew Opoku Prempeh, the Minister of Energy, stated at the first annual general meeting of BOST that the government has been working to ensure an effective Tema Oil Refinery (TOR) to support BOST’s efforts as part of the modalities under consideration.

He declared that TOR would have the authority to refine goods and deliver them to BOST for distribution and storage.

According to him, doing so would guarantee that local consumers of petroleum products were shielded from the hardship of expensive goods, which could be the result of either the need to turn a profit or actual global problems.

After 11 years of hardship, BOST reported a profit after tax for the 2021 fiscal year of GH160.7 million, compared to a loss of GH291 million in 2020.

The company also experienced growth in its core business, with an overall 83 percent increase in revenue from sales of gasoline and gas oil.

Sales of gasoline generated revenue that increased from GH140 million in 2020 to GH340 million in 2021, and sales of gas oil generated revenue that increased from GH227 million to GH331 million during the same time period.

Also rising from GH2.9 million in 2020 to GH14.9 million in 2021 was revenue from marine transportation.

According to Dr. Opoku Prempeh, the performance was one of the most amazing corporate turnaround tales to have occurred in the public sector over the previous ten years.

“I have had the opportunity to take a look at the state of the company in January 2017 from a copious report I received and was surprised at the financial and operational out-turns of the company for 2021.

He added, “From a debt position of $624m owed suppliers and related parties, BOST has, over five years, paid $611m, with internally generated funds contributing about $423m.”

Ekow Hackman, the board chairman of BOST, stated that the company’s revenue-generating assets, which had previously decreased to 34%, had now increased to 95%.

He claimed that the government’s restoration of a portion of the BOST margin’s lost value in June 2021 had given the business some degree of financial stability.

The Chairman said, “This levy on petroleum price ensures that BOST can repair and maintain facilities in parts of the country such as Bolgatanga, Buipe, Savelugu and Akosombo, areas where private profit-oriented companies will not readily venture.”

He said that BOST had also regained the trust of the financial sector, with banks that had previously refused to work with the business now providing it with credit lines and more benevolent terms.

The State Interest and Governance Authority (SIGA), the Ministry of Finance, and the Minister of Public Enterprises all worked together to help board members and chief executive officers develop their skills in good corporate governance programmes, according to the Minister of Public Enterprises Joseph Cudjoe, who described BOST’s accomplishment as phenomenal.

He added, “Among the 50 entities that were ranked, BOST came eighth, which is not surprising at all, given its demonstration of good performance and turnaround.”

According to Edward Boateng, Director-General of SIGA, there is still room for improvement despite BOST’s related financial and infrastructure problems.

He alleged that more could be accomplished if all parties involved worked together, through creativity, and persistence.

Source: Energy Ghana

ENERGY GHANA MAGAZINE

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