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The Bulk Oil Storage and Trans...

The Managing Director of the Bulk Oil Storage and Transportation Company Limited (BOST), Edwin Provencal is appealing to the government to increase the BOST Margin from the current three pesewas per litre to nine pesewas.According to Provencal, the increment will help them maintain the deteriorating facilities at BOST, a strategic asset of the State.He explained that about GHS150 million is needed to maintain the facilities.The BOST MD added that an additional $40 million is needed for automating the facilities and another $20 million for undertaking facility enhancement projects.Mr. Provencal made the call during a recent engagement with Civil Society Organizations (CSOs) in the oil and gas sector.

About BOST margin
BOST Margin is a tax imposed on petroleum products used to cover the maintenance and operating cost of petroleum product depots and undertaking expansion programs at depots.The BOST Margin has remained at 3 pesewas per litre since 2011.In December 2019, it almost went up to 6 pesewas per litre but the decision was quickly reversed following intense pressure on government by opposition parties as well as CSOs such as the Chamber of Petroleum Consumers (COPEC).BOST MD’s cry for help in a Citi News interview after the engagement and tour of BOST’s Accra Plains Depot at Tema, the MD insisted that the company really needs an immediate injection of funds to enable them protect the country’s strategic asset which plays a very pivotal role in the country’s oil, gas and energy sector.

“The BOST Margin was solely for infrastructure maintenance. In 2011, the BOST Margin was given to us at 3 pesewas. We are in 2020, some nine years down the line where the dollar value has depreciated by 75%, we are still getting that same 3 pesewas. That is why a lot of the infrastructure is falling apart. We have to do something about it. We cannot as Ghanaians leave this strategic asset to rot away. We are trying our best but we need help hence the cry for help, the cry for Ghanaians to support the increment of the BOST Margin from the paltry 3 pesewas to at least some 9 or 12 pesewas if possible so that we can deliver our mandate to the people of Ghana.”

He said from the 3 pesewas per litre deductions, they make about 8 to 9 million cedis every month saying “that is woefully inadequate looking at what we want to do.”“In total, we need about GHS150 million to fix our infrastructure. We are not asking all of that from the government. What we are asking from government is that increase the BOST Margin, let us be equipped to maintain the existing infrastructure. There are other projects we have to do which includes automating the whole depot which comes to over $40 million. There are other small projects that we have to undertake to enhance the efficiency of the depot which comes to over $20 million. For those ones, we can engage appropriate funding sources for some money because the project can pay back. But what we are asking from government is that please don’t let this infrastructure collapse. Our national security is at risk so we need that BOST Margin to at least keep this working till we get more money to gain the efficiency-based projects,” he said.

Mr. Provencal lamented that even if BOST could maintain its facilities without any support, it will take them so many years adding that “we don’t have that much time that’s why we need some injection because an injection will let us achieve our objectives faster else we need about seven years to be able to get there.”

COPEC’s response to the request
Meanwhile, Executive Director of COPEC, Duncan Amoah, who was at the stakeholder engagement meeting was of the view that “clearly BOST would need to enhance their operations” but said “you cannot ask for more resources if you are not going to tighten your belts.”

“The only assurance we need is that whatever government and Ghanaians are going to give BOST, we would need that assurance that six months or one year from now, if we were to come back here to do this visit the story will be different in that tanks would not be rusting or pipelines that should have been upgraded are not done.”


Executive Director of COPEC, Duncan Amoah
“We are tempted to say that the new BOST agenda that the new MD is introducing could go far on condition that he would stick and do as he says, on condition that other politicians will stay away and allowing the free hand to operate professionally, on condition that BOST itself will be disciplined in order that some of the superfluous expenses are curtailed so that whatever resources they get they can put to good investments for Ghanaians. We have said that once BOST is sound, the incessant increases in fuel that we see could be managed,” he said in a Citi News interview.

Energy Security

Nana Amoasi VII, the Executive Director of the Institute of Energy Security (IES) who also spoke to Citi News said there should be a proper governance structure for the utilization of additional fund support from government should the BOST Margin be increased.“They presented the BOST case where they said they were underutilizing their asset and most of their infrastructure are in bad states. These are infrastructure funded by Ghanaians so when you see them going waste, it becomes a source of concern. Their request is a good call. Our concern is that will there be a governance structure for the money to be put to good use? Because many a time we see BOST apply all these funds inefficiently. But if they mean what they say, then it is a good course for Ghanaians,” the IES Director said.

Nana Amoasi VII, the Executive Director of the Institute of Energy Security


About BOST

BOST was incorporated in December 1993 as a private limited liability company under the Companies Act,1963 (Act 179) with the Government of Ghana as the sole shareholder.Its duties are to among other things to develop a network of storage tanks, pipelines and other bulk transportation infrastructure throughout the country, rent or lease out part of the storage facilities to enable it generate income as well as keep strategic reserve stocks for Ghana.It currently has six petroleum demand strategic zones and manages depots located in Accra Plains, Kumasi, Buipe, Bolgatanga, Akosombo and Mami Water with total capacity 425,600 m3.

 

The group, including the Institute of Energy Security, want funding to BOST increased if the state company can justify its efficiency.

BOST wants the margin to be increased from the current 3 pesewas to 9 pesewas.

The Bulk Oil Storage and Transportation Company BOST, was established to keep strategic reserve stocks for Ghana.

A BOST margin was implemented on the price build up in 2011 to cover the maintenance and expansion of infrastructure at the state company. The 3 pesewa-margin has since remained unchanged despite erosion in value by currency depreciations and inflation.

BOST margin was increased by 100% to 6pesewas in December 2019, but was quickly reversed after stiff opposition led by the Minority. The agitations were largely due to the weak governance structure and corruption that bedeviled the company in the past.

The boss of the Institute for Energy Security (IES), Paa Kwasi Anamua Sakyi said “yes it is true they need increment in their margins to be able to put up storage facilities and also maintain some equipment at their disposure , BOST hasn’t been operating efficiently overtime to import finished products and sell at a profit due to lack of storage facilities, so we’ve lost out woefully from BOST.”

The group, including the Institute of Energy Security, want funding to BOST increased if the state company can justify its efficiency.

BOST wants the margin to be increased from the current 3 pesewas to 9 pesewas.

The Bulk Oil Storage and Transportation Company BOST, was established to keep strategic reserve stocks for Ghana.

A BOST margin was implemented on the price build up in 2011 to cover the maintenance and expansion of infrastructure at the state company. The 3 pesewa-margin has since remained unchanged despite erosion in value by currency depreciations and inflation.

BOST margin was increased by 100% to 6pesewas in December 2019, but was quickly reversed after stiff opposition led by the Minority. The agitations were largely due to the weak governance structure and corruption that bedeviled the company in the past.

The boss of the Institute for Energy Security (IES), Paa Kwasi Anamua Sakyi said “yes it is true they need increment in their margins to be able to put up storage facilities and also maintain some equipment at their disposure , BOST hasn’t been operating efficiently overtime to import finished products and sell at a profit due to lack of storage facilities, so we’ve lost out woefully from BOST.”

But then he went on to suggest that good governance going forward will help them to take advantage to store a lot of products in times like this where boarders are locked. “So if they are willing to give us an assurance to make good use of the money they are requesting for, why not, we will support them to push for it.

On Thursday, 30th April 2020, the Institute of Energy Security, the Africa Centre for Energy Policy, The Chamber of Petroleum Consumers, and the Chamber of Electricity met with BOST management over ways to improve their operations. The Managing Director of BOST, Edwin Provincal said his administration has restored two out of the four barges used to push products to the country’s north, cleared some legacy debt and plans to automate its systems to easily detect fraudulent activities.

The transformation he said has stagnated over funding challenges, hence the plea for an immediate increase in the BOST margin.

Although the energy sector CSOs pledged support for an increase in the BOST margin, they however want management to justify their efficiency.

Management of BOST said once the margin is increased, it will complete the automation within a year. This will help prevent artificial losses and improvements.

donate covid 19

The Bulk Oil Storage and Transportation Company Limited, BOST has donated assorted items to help with the fight to prevent the spread of the COVID-19 pandemic in the country.

Presenting the assorted items to the Office of the First Lady at Ridge in Accra, Mr. Moses Mensah Assem, the Deputy Managing Director of BOST said, the company could not sit idle as Corporate Ghana is doing everything to help government in saving the nation from the dreaded virus. He commended the President for his leadership in the fight and also praised the Office of the First Lady for the positive steps they have taken so far through the Rebecca Foundation towards making life safe and comfortable for the less privileged in such challenging times.

He also capitalized on the opportunity which was witnessed by selected media organizations to advise Ghanaians to observe the social distancing and other preventive measures outlined by government to stop further spread of the virus.
He assured that given the right support, BOST will contribute meaningfully towards the building of the nation as a profitable state owned enterprise.

In receiving the items on behalf of the Rebecca Foundation, the Executive Secretary to the First Lady thanks BOST for the kind gesture and assured the items will be put to good use to help further strengthen the fight towards the prevention of the spread of the virus.

She emphasized the foundation will stop at nothing in its effort to help protect the poor and vulnerable from falling victims to the dreaded virus.

The items included thirty (30) Veronica buckets, thirty (30) cartons of GIHOC Hand Sanitizers, three (3) cartons of liquid soap and twenty packs of hand towels.

The Bulk Oil Storage and Transportation Company Limited, BOST is a state owned Limited Liability Company with the mandate to ensure even supply of petroleum products across the country whilst ensuring the keeping of strategic stocks to keep the economy running in the event of any global supply emergencies.
***

ADJEI MARLICK
HEAD, CORPORATE COMMUNICATIONS AND EXTERNAL AFFAIRS

logo displayThe Management of the Bulk Oil Storage and Transportation Company Limited, BOST, announces for the information of the general public that its working hours has been slightly adjusted due to the outbreak of the global pandemic, COVID 19.

The company which opens and closes between 8:00 am and 5:00 pm now opens at 9:00 am and closes at 5:00 pm.
Clients are urged to as much as possible utilize various online portals for their enquiries: email, Facebook, website, phone calls etc. Where there is the urgent need for direct engagements, the start time has been shifted one hour up to 10:00 am.

Management has also given staff the option to take their annual leave within this period to help the employees achieve the needed social distance to reduce the risk of staff getting infested with the virus or spreading same to their colleagues.

For the safety of our clients and employees, hand sanitizers have been provided at all entrances to ensure people walk in with healthy hands to reduce the risk of infection. We urge our clients and employees to make use of these provisions for their own health and safety.

The Management of BOST counts on your cooperation for a smooth sail through the waters of the COVID 19. Together, we shall overcome.
Ghana we serve; BOST we belong.

For further enquiries, log on to our website at www.bost.com.gh.
OR Call direct through:
Front Desk +233 (0)302 770546
Mobile +233 (0)200431578

Thank You. ​

Corporate Communications and External Affairs

The Management of the Bulk Oil Storage and Transportation Company, BOST, is confident its agenda to turn around the fortunes of the loss-making entity is on course following its ability to fully settle a 12-year old credit facility contracted from GCB Bank.

The loan sourced from GCB in 2008 has been in arrears and attracted several penalties from the bank.

But the Chief Executive Officer of the company, Edwin Provencal, has told Citi Business News the GH¢64 million credit facility, which was sourced to boost the trading position of BOST, was completely settled last month.

“In 2017, when we came to power, we engaged GCB Bank, and the good news was that they waived off all penalties and other charges etc, with the promise that they were going to stick to our payment plan. So, that is what we have been doing since 2017, and the good news is that the last bit was cleared last month January, so we have finished clearing GCB debt.”

“We are extremely excited. What this does is that it cleans our balance sheet. It contributes to our balance sheet so we can leverage it to borrow for our operations. We assure that going forward, any other facility we get, we will use a much-disciplined approach to get it,” the BOST CEO stated.

BOST turnaround agenda

The settlement of the GCB Bank loan comes at a time the oil storage and transportation company has embarked on a drive to bring the company back to profitability.

According to Mr. Provencal, it would take an amount of US$150 million to turn around the operations of the company.

Making a case for the amount, Edwin Nii Obadai Provencal, the Managing Director of BOST, said about US$75 million of the funds would be used to upgrade and rehabilitate the company’s infrastructure and the other half would be deployed as working capital.

According to him, the new funding would make the company economically viable and lead to the payment of dividend to government within the next two to three years.

Mr. Provencal explained that the needed funds could come from an increase in the BOST Margin in the petroleum product Price Build-up, government support; or funding from Investors.

He noted that should the option of BOST margin be implemented, it would result in the immediate increase in the prices of fuel, but would in the medium-to-long term, be of great benefit to consumers as BOST’s effectiveness would reduce the price at the pumps.

Mr. Provencal said the capital injection would enable the company to move from its current state of loss-making and low capitalization to a profit-making and dividend-paying company.

Mr. Provencal said the capital injection would also help the management to desist from under-utilizing the company’s assets and use resources fully to operationalize the dormant barges of the company, which transport oil from Akosombo to Buipe and other resources lying idle.

He said the new strategy is focused on improving the operational efficiency of the company by moving from the use of outdated manual systems to a full automation system.

“If the regulator does not regulate well and allows cross zonalisation, then, our dreams may be delayed,” he said, adding that, the vision to transform BOST would not be materialized if we don’t do effective stakeholder management.”

Mr. Provencal said the vision would not come to fruition if there is poor stakeholder management with transporters, tanker drivers’ unions, the regulator, the government, employees of BOST and many other stakeholders.

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