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Business News of Tuesday, 1 October 2013

Source: graphic.com

Comment: TOR, 50 years and suffering


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In March 1957, when Ghana obtained its independence from British colonial rule, our first president, Osagyefo Dr Kwame Nkrumah, and the Convention People’s Party government sought to create a society that would offer a much better life and happiness for all its citizens.

Dr Nkrumah set up many state institutions that he envisaged would boost Ghana’s quest to achieve agricultural and industrial development. In pursuit of this objective the government set out to build a number of social services like hospitals, schools, housing and a good road network.

In the area of housing, the new Tema town serves as a testimony to the efforts made to house the working people of Ghana while the construction of the Tema harbour and the Akosombo Dam were clear indications that the first post-independence government of Ghana envisaged an industrialised country within a few years of independence.

Having awarded the construction of the Akosombo Dam on contract in recognition of the role energy played in the industrialisation of a nation, Dr Nkrumah inaugurated Ghana’s first and only crude oil refinery on September 28, 1963, exactly 50 years ago today. Then known as the Ghanaian Italian Petroleum Limited (GHAIP), it was later to be known as the Tema Oil Refinery (TOR).

In the words of Dr Nkrumah, the refinery was to serve as a “vital foundation for the establishment of other industries in Ghana”. Sad to say, however, 50 years on, TOR is a pale shadow of itself at a time that Ghana has joined the league of oil-producing countries and many expect that it would be operating at its peak.

The DAILY GRAPHIC is aware that the once vibrant oil refinery has gone through a lot of challenges which have led to frequent shutdowns. Among the myriad of challenges faced by the refinery are its debts, resulting from the resolve of successive governments to subsidise the price of fuel. This has led to the famous “TOR Debt”, which appears not to go away.

Another challenge is the refinery’s inability to have a working capital to be able to keep abreast of technological advancements in the sector.

One challenge facing TOR, and which is seldom talked about during discussions on the fortunes of the refinery, is the interest of big and influential oil business moguls in the success of the company. We are aware that these business people go to great lengths to ensure that the refinery is reduced to a storage facility for finished oil products to enable them to carry out their profitable business of importing finished products.

For as long as their importation businesses prosper, these moguls make sure, through obvious means, to keep TOR where it has been reduced to. We are inclined to believe that successive governments have been unable to look at the activities of these business people because all of them have members who are engaged in the importation of finished products and for whom the success of TOR would mean a collapse of their lucrative businesses.

This situation needs to change. The state must support TOR to be more relevant.

While inaugurating the plant in 1963, Dr Nkrumah charged GHAIP to, in the event of Ghana finding crude oil, purchase and refine the crude oil. Ghana has found crude oil now and is in business. Let no one tell us that is not possible. To the ordinary man in the street, it makes no sense for Ghana to be an oil producer and still import finished petroleum products. We await that time when Ghana will have an ‘integrated’ oil industry.

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