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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.

We have taken notice of a publication with the above caption in the Goldstreet Business newspaper published on Friday, January 10, 2020 and we wish to clarify a few issues therein as follows:

• In the fourth paragraph on the second page of the paper, the writer alleges that BOST admits to losing $2 Million per month to transmission losses. We wish to state that, fuel distribution/transmission across the country is not done at the cost of BOST and the company cannot be said to be losing anything to transmission. The claim is unfounded and couldn’t have come from BOST.
• The distribution of petroleum products across the country is a two-stage process: primary and secondary distribution. Both stages are funded fully by specific taxes in the petroleum price build-up which is collected by the Ghana Revenue Authority, GRA, and paid through the National Petroleum Authority, NPA, the regulator of the petroleum downstream. Transport service providers present their bills with supporting documents to BOST and the claims are made on the fund at NPA. The funds received are then paid to the transporters less the value of any shortages recorded in the values they successfully deliver at the various BOST Depots.
• Primary distribution/transmission is the movement of product from the BOST receiving depot to other BOST depots across the country. This is funded by the Primary Distribution Margin, PDM.
• Secondary distribution/transmission is when products are loaded from BOST depots and discharged at various Oil Marketing Company, OMC, sales points across the country. This is funded by the Uniform Petroleum Price Fund, UPPF.
• This means, the petroleum product consumer who pays for products consumed pays for the cost of transmission in the process. BOST does not pay for product transmission across the country.

We would like to assure the general public that all efforts are being made to ensure that petroleum products are made available across the country at reasonable prices at all times.

Meanwhile the threat of product contamination as the paper rightly stated is fully eliminated and in the event it occurs, the company is limited to blending, re-refining or competitive tendering for the disposal of such products. In addition to these, any officials found culpable of any such development as the Managing

Director rightly stated will be surcharged with the full value of the product concerned less any value realized from the listed processes.

There was an incident of fire at the truck park of the Buipe Depot of the Bulk Oil Storage and Transportation Company Limited, BOST in the late hours of Friday, January 3, 2020.

The Buipe depot is the central fuel holding point of BOST serving the Savana, Northern, North-East, Upper East and Upper West regions of Ghana. It receives products through river barges (via the Volta Lake) and through Bulk Road Vehicles, BRVs loaded from the Accra Plains depot of BOST.

To put an end to the speculation in the media space, we wish to state the facts of the incident as follows:

1. The fire occurred at the truck park of the depot and not within the depot.
2. It started around 6:15 pm in the evening and took a combined force of the depot technical staff and fire officers from the Damongo and Tamale Fire Stations to bring it under control around 10 p.m.
3. Four BRVs, two of which were loaded with petroleum products were severely burnt.
4. The two trucks contained 36,000 liters of diesel (AGO) and 36,000 liters of petrol (PMS) respectively. The diesel (AGO) is intact though the truck is burnt.
5. At the current price of GHS5.41/liter, the value of the product lost is estimated at GHS194,760.00.
6. The affected BRVs belonged to Ghana Oil Company Limited, GOIL (3) and BF Energy (1).
7. All BRVs registered and certified to haul products to and from BOST depots are comprehensively insured.
8. All depots of BOST are insured in full due to the nature of the products the company stores and transports.
9. In line with our Standard Operating Procedures, (SOPs), trucks loaded with products for distribution to OMCs are not supposed to park within the premises of the depot.
10. The exact cause of the fire has not been ascertained as at now and investigations are underway. We shall furnish the pubic with the details once the technical team completes the investigations.
11. Though a sizable volume of products loaded for OMCs, were destroyed in the incident, product supply in the northern regions and the general operations of BOST as a company will not be negatively affected.
12. We wish to assure the general public that, our strategic fuel stocks for the northern regions and Ghana as a whole are intact.

Adjei Marlick Head, Corporate Communications and External Affairs