Another fuel crisis looms: Banks withdraw LCs to bulk buyers

StarrFMonline.com has gathered that major crude importers are unable to buy enough supplies of the product for distribution in Ghana due to their inability to secure Letters of Credit from local banks.

The Banks are withdrawing their LCs due to lack of enough dollars in circulation in the Ghanaian economy.

The West African country's local currency has depreciated by about 40 percent against the dollar and other major international currencies of trade.

The inability of the bulk buyers to secure LCs to buy crude will mean the Bulk Oil Distributing Companies (BDCs) will run out of stock, and that will have a domino effect on stocks at the pumps.

The rippling effect will result in another fuel shortage, which will in turn spark another crisis, barely a month after the young-oil producing country emerged out of a similar situation.

Chief Executive Officer of the Bulk Oil Distributing Companies, Senyo Horsi described the current stock situation as “critical and challenging” when he spoke to private Radio Station, Joy FM, but cautioned consumers against panic-buying, which he warned, could rather exacerbate the problem.

The country’s independent National Petroleum Authority (NPA) is also billed to review fuel prices soon as part of its bi-weekly automatic price system.