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Business News of Tuesday, 25 August 2020

Source: www.ghanaweb.com

COPEC reveals the cause of Tema Oil Refinery collapse

Tema Oil Refinery (TOR) shut down its operations in June 2018 due to lack of crude oil which serves as raw material for the refinery.

However, Executive Secretary of the Chamber of Petroleum Consumers Ghana, Duncan Amoah in an interview with GhanaWeb has listed several things that contributed to the collapse of the Tema Oil Refinery two years ago.

Below are the reasons as suggested by COPEC:

Use of old equipment and poor management

According to the Executive Secretary of the Chamber, Duncan Amoah, the collapse of the refinery was due to the poor management of the refinery in the past, as well as, the use of old equipment in recent times.

Based on this, Mr Amoah asked that the equipment at the refinery be retooled and government must immediately pump money into TOR to revive it.

“We’ve had in the past poor management practices where you expect certain things to be done right are done the other way. We’ve also not had the right kind of investment and retooling and so equipment some of which were fixed in the 80s, 70s are still working as at today. We think that the right investment should be made in the refinery because refineries are profitable else, you wouldn’t see in our neighbouring country Nigeria Dangote struggling to put up 650 barrels per day refinery. Ghana has this asset that if we did put in the right investment should be able to serve all of us,” he told GhanaWeb.

He added that TOR in the past contributed to the growth of the economy but, unfortunately, the refinery is on its knees.



Turning TOR into a tank hub

The Executive Secretary of COPEC insinuated that it will be inappropriate for the government to turn the nation’s oil refinery into to tank hub.

Speaking on the issue with GhanaWeb, Mr Amoah said “We do not think that it would make economic sense to turn a 1billion facility to a tank hub. They have the tanks, it’s good. You can use the tanks and still let the refinery also work to contribute to Ghana’s GDP or economy. At one time, TOR alone contributed between 5 to 10 % of Ghana’s GDP, today as we speak, it is down, the plant itself is not working because of inefficiency”.

He indicated that until government retools TOR to bring it to the standards of Europe, it would be difficult for authorities to sustain it.

We’ve paid for TOR recovery debt for the past 16 years

Duncan Amoah requested that monies collected to settle the Tema Oil Refinery for many years, some should be used to furnish the place for effective work to commence

"How much couldn’t have been realised from the TOR debt recovery levy till now to bring the refinery to some modern status. Unfortunately, the more Ghanaians pay for the levy, the lower the refinery sinks. So it looks as though we are throwing money into an abyss and we would want to see those funds applied to retool the refinery".