President Orders $60m For BDCs
Seth Terkper, Minister of Finance
The President has directed the Finance Minister, Seth Terkper to release $60 million to the Bulk Oil Distribution Companies (BDCs) to ensure that there is enough fuel in the system, according to the Information & Media Relations Minister, Mahama Ayariga.
There is fuel shortage in some cities across the country, including Accra, Tema, Cape Coast and Kumasi.
Hundreds of drivers have queued at various filling stations hoping to fill their fuel tanks.
Both motorists and passengers are complaining bitterly about the situation because according to them, it is hindering their movements and making them unproductive.
Government owes the BDCs GH¢1.8 billion, and as a result, international suppliers of petroleum products have refused to release a week’s supply of petrol and diesel until the BDCs honour their debt obligations.
Reports further indicate that local banks have declined to issue letters of credit (LCs) to the BDCs to pay off their debts to their international suppliers because the current debt is threatening the survival of the banks.
The Information Minister said when the debt is settled, government will consider whether it is imperative for it to continue subsidizing petroleum products.
He said government regrets the level of inconvenience the fuel shortage is causing the general public and its failure to keep up with the provision of subsidies on petroleum products.
According to him, government is surprised by the fuel shortage because it has been meeting with the BDCs.
‘And from all indication, there was no sign that there will be shortage based on the discussions we had been having with them.’
The directive to the Finance Minister is said to have been given on Tuesday to enable the BDCs ‘obtain Letters of Credit so that we can prevent these queues at the filling station’ while discussion continue with the BDCs on long-term solutions.
Mr. Ayariga expressed optimism that once the money is released, the fuel situation will return to normalcy.
He gave the assurance that the long-term solutions on fuel subsidies will be sought.
In June 2013, government announced the removal of fuel subsidies to reduce budget deficit.
The petroleum products affected included petrol, gas oil and Liquefied Petroleum Gas (LPG), which form about 95 percent of domestic (petroleum) products.
In December 2013, the National Petroleum Authority (NPA) increased petroleum prices using the Automatic Adjustment Formula.
In subsequent months, petroleum prices were upwardly adjusted, resulting in a huge public outcry.
Government therefore decided to absorb the prices of petroleum products to cushion consumers.
For months now, there have been no adjustment of fuel prices and government has been unable to pay the absorbed prices.
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