Business News of Tuesday, 19 February 2013
The Chief Executive of the National Petroleum Authority [NPA], Alex Mould has called on government to consider privatizing Tema Oil Refinery (TOR) for efficient management.
He intimated that TOR constitutes a liability rather than an asset to the state, therefore privatizing it will save government from any potential economic risk.
Alex Mould made the proposal on Asempa FM’s Ekosii Sen programme Monday.
TOR, Ghana’s only state-run refinery has been operationally idle since July last year due to the breakdown of critical equipment.
According to sources, both the main crude distillation unit and the residual fuel catalytic converter of the 45,000 barrels-per-day refinery plant had been shut down due to lack of funds to replace the changers [a component of the plant] and boilers which are worn-out.
But calls for TOR to be privatized have been vehemently opposed by a cross section of the citizenry who argue that the company will make profit if its management is depoliticized.
However, the CEO of NPA maintains that TOR has been indebted due to the inefficient way it has been managed.
He said over the years, TOR has made losses and thus will continue to pose a significant threat to government revenue unless steps are taken to control the debt.
“Tema Oil Refinery has not made profits since 1996 and as such it is quite clear that government should be out of the business of refining because it is not in to make profits.” he added.
Alex Mould noted that if government wants to run the refinery then it must do so professionally by injecting a lot of capital to make TOR self-sufficient and bring it up to spec.
“The refinery is inefficient because of the various problems it has and government will have to spend money as the only shareholder. Government has to decide whether it wants to use its money, whether it wants TOR to borrow or whether it wants a strategic investor to come in and take over”.
He stated unequivocally that the problem at TOR is the continuous government interference which has made the refinery a nonprofit organization.
Alex Mould said evidence indicates that the only way to effectively manage TOR is to privatize it.
“If we want the refinery to work properly then government has to step aside and let TOR run efficiently. Either it does that or privatize it”.