TOR debt estimated at 4.5 trillion cedis

Total petroleum sector or Tema Oil Refinery (TOR) debt is expected to stand at more than 4.5 trillion cedis at the end of December last year. This is made up of medium term bonds of four trillion, 25 billion and 563 million cedis (4,025,563,000,000) plus TOR non-recovery of five hundred billion cedis (500,000,000,000).

"The total petroleum sector or TOR debt is therefore, expected top stand at 4,525,563,000,000 cedis," a statement signed by Dr J.K. Richardson, Chairman of the Interim Management Committee of TOR, said on Wednesday.

Giving details about TOR's debts, the statement said the refinery's debt was accumulated largely between 1999 and 2000 because the ex-refinery prices did not permit it to recover costs in full.

"The total debt as at 31st December, 2000 was 3.2 trillion cedis, made up of bank overdraft and loans and amounts owed to creditors." It said the amount reported to the government when it took over was 2.1 trillion cedis as at January 2001, which were the matured debts.

"An amount of 1.1 trillion cedis was owed to 'creditors', specifically to cover letters of credit for crude oil and product purchases which had not yet matured and were believed by TOR to be the direct responsibility of the government.

"This amount was unfortunately not reported to the new government at that time."

The statement said the government became aware of this huge encumbrance in 2002 on detailed examination of the audited account of the company for the year 2000.

It said fuel price increases of 2001 were not implemented until late February of that year.

"Consequently, there were almost two more months of under recovery of costs totalling 207 billion cedis." The statement said total debt therefore at the end of February 2001 was 3,392,563,000,000 cedis. This was made up of 2,104,500,000,000 in bank overdrafts and loans, 1,080,748,000,000 owed creditors and 207,315,000,000 being the shortfall for January and February. The statement said this debt has increased since February 2001 due to interest charges.