The Mines and Energy Committee of Parliament has waded into the latest controversy surrounding the alleged sale of products by the Bulk Oil Storage and Transportation Company (BOST) at a rate below the market price.
Executive Secretary of the Chamber of Petroleum Consumers (COPEC), Duncan Amoah, has accused BOST of causing financial loss to the state to the tune of some 30 million dollars when it sold about 1.8 million barrels of oil below the market price to an unlicensed company.
According to the Chairman of the Committee, Emmanuel Akwasi Gyamfi, BOST and other interested parties in the matter will be engaged to better inform the Committee on how to deal with the issue.
“We engaged BOST before this issue came up, and we were scheduled to meet them again when this issue came up. We want to take our time and meet them and do proper due diligence; we have to get the necessary documentation so that we can reach an informed decision,” he said.
The Managing Director of the Bulk Oil Storage and Transportation Company (BOST), Alfred Obeng Boateng, has so far denied allegations of financial malfeasance against the company by the Chamber of Petroleum Consumers (COPEC), saying they are false and baseless.
The explanation for ‘discount’
Mr. Obeng Boateng noted that, the oil in question could not have been sold at the official price because of the amount of time that had passed between the time of purchase and sale.
“In his [Duncan Amoah] statement, he exposed his ignorance when he stated that at the international level Quaibo Crude is sold at Brent plus $0.85 per barrel as official price, and therefore BOST has caused financial loss to the state by selling its own at a discount of $2 per barrel. It must be noted here that a cargo imported with the aim of refining or using for one purpose but did not materialize and reselling it about 10 months later, cannot be sold at the official price. Such a product is considered distress and is always sold at a discount globally.”
“As we speak, BOST has offers for such distress cargoes at a discount of $4 per barrel. Any person competent in the industry would have asked for the details before issuing this illogical and baseless statement actuated by malice and selfish interest to mislead the good people of Ghana. Thus keeping the crude for such a period may affect the quality and for that matter the yield, hence the assay is a factor in pricing,” he explained.
Below is the full statement
Bost MD Reacts to Dancun Amoah False Allegations
To commence I would like to put it on record that Duncan Amoah the so-called executive secretary of Copec is an enemy to the progress of BOST. He should, therefore, be ignored at all times.
Duncan Amoah is one of the people being used to used to distract the new administration through false, baseless, needless and malicious publications against BOST since the assumption of office by Mr Alfred Obeng, the current Managing Director of Bulk Oil Storage and Transportation Limited for no other reason but for their personal and selfish individual interest.
We are not insulated from criticism but criticism must be constructive and logic devoid of personal interest and malice.
The statement issued about BOST by Dancun Amoah, a man who is an enemy to the progress of BOST is not only unfortunate and misleading but a clear sign of his ignorance about the petroleum industry that he is deceiving the media and the general public that he has a rich knowledgeable in.
In his statement, he exposed his ignorance when he stated that at the international level Quaibo Crude is sold at Brent plus $0.85 per barrel as official price and therefore BOST has caused financial loss to the state by selling its own at a discount of $2 per barrel. It must be noted here that a cargo imported with the aim of refining or using for one purpose but did not materialise and reselling it about 10 months later cannot be sold at the official price. Such a product is considered distress and is always sold at a discount globally. As we speak BOST has offered for such distress cargoes at a discount of $4 per barrel. Any person competent in the industry would have asked for the details of the assay before issuing this illogical and baseless statement actuated by malice and selfish interest to mislead the good people of Ghana. Thus keeping the crude for such a period may affect the quality and for that matter the yield, hence the assay is a factor in pricing.
He further stated that crude price hit $70 per barrel in January 2018. Is he saying that BOST should have waited until that time before selling the product? If that is what he wanted to put across then it is better he swallows it because same will expose his weakness in analysing commercial decisions. If that is what he thinks then it is equally advisable for BOST to have waited and sold it somewhere the year 2050 perhaps crude price may hit $150 per barrel. Duncan Amoah should revise his notes very well if indeed he had ever had education in petroleum otherwise he should seek admission to study certificate in petroleum in order for him to have the required competencies to criticise constructively.
If Duncan Amoah meant well the first thing to do is to find out the rationale behind such decision be it commercial or not. But you cannot just get up and issue such statement that has potential to damage reputation of your fellow human beings and the very company that belongs to all of us as Ghanaians because of your individual interest of looking for cheap money.
His allegation that when selling the crude BOST did not involve Tema Oil Refinery where the crude was kept again shows how naive Dancun Amoah is in the petroleum downstream industry. What role would TOR play when BOST is selling its own product? When BDCs are selling their products in BOST system does BOST get involve? BOST only informed TOR of the new owner with a release letter as the practice in the industry.
Further allegation that BB Energy processed the crude at TOR without a license is outside the mandate of BOST and therefore Dancun Amoah should find out the exact arrangement BB Energy had with TOR and NPA before accusing BOST since same is outside BOST responsibilities. He thinks BB Energy did so illegally he can report same to NPA to sanction them.
Commenting on the tolling fees charged by TOR, again this is outside BOST mandate but in any event the Managing Director of TOR and his team have been given the mandate to take decisions that will promote the success of the company hence can take a commercial decision in the interest of TOR. Assuming that the tolling fee was $3.5 per barrel against $4 or $4.5 per barrel at the international level, does Dancun Amoah know the factors underlying TOR decision to accept the $3.5?
One of the major factors in deciding tolling fee is the efficiency of the refinery, which Duncan Amoah did not mention but jump to accuse people of wrongdoing. He cannot run down state institutions anyhow just because of his personal interest?
Again it is clear from the statement that Duncan Amoah so-called executive secretary of Copec lacks both fact of the transaction and the knowledge in the petroleum downstream industry. First of all the crude sold to BB Energy was 942000 barrels but not 1.8 million barrels as he claims.
For his information, 1 million barrels of the TEN crudes was being refined when TOR broke down. The remaining was given back to the supplier called AOT to set off our indebtedness to that company. So where did he Dancun Amoah get this 1.8 million barrels crude alleged to have sold to BB Energy from?
We are appealing to the media and the general public to ignore this man and his so called Copec formed for personal gains at the expense of the national interest.
The same person has been complaining about rising of fuel prices and at the same time distracting the very company that requires a peaceful mind to strategize to stabilise fuel prices in the market. Everyday management is having crisis meeting because of these false and misleading publications thereby preventing management from concentrating on its core mandate. Ghanaians and the media should not allow this selfish individual to fool us by placing his interest above the national interest.
Anybody interested in his frivolous statement can come to BOST offices to verify the truth or otherwise.
On the issue of a death threat, the Managing Director has already instructed his lawyers to take legal action and will soon be communicated to the general public. On this falsehood and malicious publication about the company, the board had referred the matter to its legal community to advise the Board within 24 hours.
According to the Managing Director, the public should continue repose confidence in him because he will never take any decision that will not promote the success of BOST.
Signed: Mr. Alfred Obeng Boateng, MD For BOST.
Allegations BOST Ghana News The Mines and Energy Committee of Parliament Farida Yusif