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Business News of Thursday, 24 February 2005

Source: GNA

BUDGET: Govt committed to petroleum deregulation policy

Accra, Feb. 24, GNA - Government says it is committed to pursuing the Deregulation of the Petroleum Sector with the key objective of ensuring uninterrupted supplies of petroleum products throughout the country.

It is to attain maximum efficiency in investments and operational performance, and to ultimately meet adequate standards on quality and safety at equitable prices in the supply of petroleum products to consumers.

The Minister of Finance, Mr Kwadwo Baah-Wiredu said deregulation was intended to encourage the Private Sector investment in the provision of infrastructure and other service in the petroleum downstream sector including participation in the importation of crude oil and petroleum products.

It is also meant to reduce the financial debt burden of TOR through efficient pricing of petroleum products.

The Finance Minister was presenting the Budget statement of the Government to Parliament on Thursday.

He said as a first step, Tema Oil Refinery's (TOR) operations were restricted to processing of crude oil in 2004 and the private sector (Oil Marketing Companies (OMCs)) agreed to finance the procurement and importation of the shortfall of finished products.

The first tender for importation by OMCs was held in March 2004. Besides, he said, various projects were undertaken in order to ensure availability of petroleum products in all parts of the country and for export.

These included Rural Kerosene Distribution Improvement Programme; Export Oriented Oil Refinery Project; Single Buoy Mooring (SBM) Project and Buipe-Bolgatanga Petroleum Products Pipeline Project. The Minister said the implementation of Petroleum Deregulation Policy commenced on Friday, February 18 2005 with the announcement of new prices for petroleum products.

He said the prices based on the existing pricing formula were designed to realign domestic prices with international crude oil prices.

This was to set the stage for the OMCs to take over the pricing of petroleum products under the supervision of an independent National Petroleum Authority (NPA). Legislation to back the regulation functions of the NPA is to be enacted this year.

The Minister said Government was mindful of the possible hardships the policy might impose on most Ghanaians and had, therefore, put in place measures to mitigate the consequences. 24 Feb. 05