National Security must ensure BOST turns to core mandate – COPEC boss

The Executive Secretary of the Chamber of Petroleum Consumers (COPEC) has called on National Security to – as a matter of urgency – ensure that the Bulk Oil Storage and Transportation Company Limited (BOST) stays true to its core mandate.

According to Duncan Amoah, BOST has in recent times been focused on “completely tangential developments derailing it from achieving the core mandates and objectives as envisioned by the Act setting up this facility”.

Mr Amoah noted in a statement issued on Wednesday, September 18 that BOST was set up about 20 years ago to ensure that there is adequate storage for national strategic fuel stock as well as ensuring the development and operationalisation of efficient transportation systems as regards the movement of petroleum products.

But these seem to have been relegated to the background by BOST, the COPEC Executive Secretary laments.

He was speaking in the wake of the recent developments in the Gulf Region, particularly in Saudi Arabia, after about 50 per cent of its oil supply was knocked out following a bomb attack on Saturday.

The statement said the development must wake BOST up as regards its core mandate.

“We advise the new Managing Director to immediately put in place a system that makes the deveoplement and operationalisation of fuel transmitting pipelines finally a reality and to also ensure the margins contributed by Ghanaians currently is put to good use by procuring strategic stocks for the country in view of recent developments in the gulf region where 50% of supplies from Saudi Arabia has been knocked off due to instability and its net effect on global fuel pricing as prices are currently rallying at all time highs without any back ups from our national strategic storage facility.

“The Board of Directors together with the new Managing Director and Management should ensure that BOST expands its storage and transmission/transmission infrastructure to accommodate fuel demand growth, it has rather colluded with the past MDs to promote staffs and increase the number of staffs from roughly 400 to 700 in a period of two and half years, although the company’s business portfolio had seen a significant decline over the same period.”

It said the National Security Council must also get involved.

“The National Security Council should as a matter of urgency ensure Bost does not delay any further in activating its strategic stock holding mandate as well as the brisk development and operationalisation of all pipelines to ensure a safer more efficient Transportation of fuels across the country.”

Find the full statement below:

RECENT DISTURBING DEVELOPMENTS IN THE GULF REGION AND SAUDI ARABIA SHOULD SERVE AS A CATALYST TO REPOSITION BOST.

ACTIVATE THE STRATEGIC STOCK HOLDING AND DEVELOPMENT OF FUEL TRANSMISSION PIPELINES IMMEDIATELY

The setting up of the Bulk Oil Storage and Transportation ( BOST ) some two decades ago to primarily ensure there is adequate storage space for holding national strategic fuel stock as well as the sole mandate to ensuring the development and operationalisation of efficient transportation systems in respect of, the movement of petroleum products to all parts of the country seem to have been relegated to the background in recent times and this is once becoming a source of worry in view of recent developments in the Gulf Region as Saudi Arabia’s oil supply has seen a 50% knock out following from attacks purported to be sponsored by Iran.

Contrary to these core operational mandates of our national strategic facility for which the tax payers money has been heavily invested into putting up of depots and tank farms across the country. Bost has in recent times been focused on completely tangential developments derailing it from achieving the core mandates and objectives as envisioned by the Act setting up this facility.

The primary focus on creating space for private Bulk Oil Distribution Companies to store and pay for the storage of their products from what is known as through-put charges is completely an aside which must not shifted to now become the key focus of Bost.

Due to inactivity on the core deliverables of the company this through-put issue has now become more or the less the mainstay of this state installation.

Past successive managements have rolled out different plans and programmes but what is evidently clear is the loss of focus on the key deliverables including the development and operationalisation of an efficient Transportation system in the movement of petroleum products across the country.

Whiles the company continue to reel under heavy financial pressures and currently asking for further capital injection from the public in order to undertake some maintenance on the over 20 year tanks across the country, it becomes even more necessary at this point due to global developments to reposition this strategic national facility to focus on its key deliverables in order to make it, self sustaining and profitable as opposed to the current system of waiting on payouts from the Bost margins in the price build up and the through-put agreements with very little efficiency in the system.

It is disturbing that after almost two decades of existence, Bost at present continues to transport all fuel across the country by the use of Bulk road vehicle systems (BRVs), which is known to put extreme pressures on Ghana’s road infrastructure together with its many other attendant problems such as fuel diversions, theft, accidents and inflammable fires.

Bost has since the past couple of years been working behind the scenes to develop and operationalise the pipeline systems in order to transport fuel to the major depots across the country, these pipelines though comes at almost a billion investments also have the potential to save bost and the Ghanaian taxpayer a minimum projected annual savings of over Ghc300 million.

The current system where fuel transportation to around the country is only done using the heavy trucks and its attendant challenges is clearly not a sustainable and must be discarded if Bost should be re-equiped to operate in a more cost effective, efficient safer manner so as to remove the steeply embedded corrupt practices within the system that now makes fuel haulage allocation a gold mine for some management and staff to only get rich at the expense of the company and Ghanaians in general.

We advise the new Managing Director to immediately put in place a system that makes the deveoplement and operationalisation of fuel transmitting pipelines finally a reality and to also ensure the margins contributed by Ghanaians currently is put to good use by procuring strategic stocks for the country in view of recent developments in the gulf region where 50% of supplies from Saudi Arabia has been knocked off due to instability and its net effect on global fuel pricing as prices are currently rallying at all time highs without any back ups from our national strategic storage facility.

The Board of Directors together with the new Managing Director and Management should ensure that BOST expands its storage and transmission/transmission infrastructure to accommodate fuel demand growth, it has rather colluded with the past MDs to promote staffs and increase the number of staffs from roughly 400 to 700 in a period of two and half years, although the company’s business portfolio had seen a significant decline over the same period.

Bost when working efficiently should be able to hold stocks of between 8 to 12 weeks at current capacity which has seen little expansion over the past years, we implore the Board and Management to also work hard to expend this stock holding potential to at least 20 weeks if the country can be any assured of fuel price stability in respect of global developments on fuel pricing.

The National Security Council should as a matter of urgency ensure Bost does not delay any further in activating its strategic stock holding mandate as well as the brisk development and operationalisation of all pipelines to ensure a safer more efficient Transportation of fuels across the country.

Signed

Duncan Amoah

Executive Secretary

Copec-Ghana