Business News of Tuesday, 26 February 2013

Source: myjoyonline

TOR boss, Energy Minister, disagree on TOR debt

The Chief Executive of the Tema Oil Refinery (TOR) and the Minister for Energy and Petroleum have given contradictory and convoluted answers to questions regarding the application of the TOR Debt Recovery Levy.

Energy Minister Emmanuel Kofi Buah insists the monies accruing from the levy have been used to partially settle TOR’s debts, while TOR boss Ato Ampiah insists that the levy, which was imposed on petroleum products to pay down the Refinery’s debt was not used for this purpose.

TOR has been saddled with mounting debt resulting from government’s persistent failure to reimburse it for subsidizing petroleum products, necessitating the imposition of the levy to pay the debt.

However, money accruing from the levy is suspected to have also been diverted to other government projects.

Some TOR workers have accused powerful politicians in the current government of deliberately crippling the refinery so that they continue to make superfluous profits from importing refined fuel products into the country while TOR is not performing at capacity.

Responding to the accusations, Mr. Ampiah said TOR’s debt problems and its inability to import crude oil for refining were largely due to under-recovery and successive governments’ failure to pay for the losses incurred when the Refinery was forced to absorb fuel subsidies.

Even though the TOR Recovery Levy “is still being charged, somehow it was not applied to the TOR [debt] directly” he stated. He said even though the levy was being collected, “our debt was mounting.”

But Mr. Buah told Joy FM on Tuesday that, “not a dime, as far as I know, of the levy has been applied to anything else but to TOR.”

When reminded that the Chief Executive of TOR had stated that the money from the levy had not been made available to the refinery, Mr. Buah said Mr. Ampiah’s statements had been misconstrued.

“I think you are misquoting the Chief Executive; the Chief Executive confirms the payment [of $1.4 million] to the banks [that TOR owed,] but he is also telling you that there is an outstanding $300 million which he has been told he is going to be able to use the levy to retire. I think that he said two things,” he stated.

He said while the levy was being used to retire the debt, government had also made available to TOR an amount of $30 million for refurbishment.

The minister did not state clearly what the refurbishment entails or by what margin a refurbished TOR will cut its high inefficiency rate, which currently stands at nine per cent, seven percentage points higher than the international average of two per cent.