General News of Monday, 5 January 2015
It has emerged that government’s total debt owed the Bulk Oil Distribution Companies is in excess Gh?1.5 billion and not Ghc412 million as claimed by the National Petroleum Authority.
The NPA last week in a statement said its debt to the Bulk Oil Distribution Companies (BDCs) stood at Ghc412 million as of July 31, 2014.
Out of that amount, Ghc200 million had been paid through the windfall that has accrued from the declining price of crude oil on the international market.
However, speaking on the Super Morning Show on Joy FM, Monday, January 5, 2015, Chief Executive Officer for the Chamber of Bulk Distributors, Senyo Horsi said the amount quoted by the NPA is “just a fraction” of government’s total indebtedness to the BDCs.
“We have over 1.5 billion cedis outstanding that is yet to be paid by government,” he told host of the Show, Kojo Yankson.
A chunk of the debt, he noted, is due to variations in the exchange rate which was the result of the huge loss in the value of the local currency against major foreign trading currencies.
Another factor he indicated is the fact that the distributing companies are forced by the government to sell the products at a fixed price even when they bought it at a higher price on the international market.
But the NPA says costs incurred by the BDCs as a result of foreign exchange losses are not the concern of the authority.
According to Public Relations and Consumer Services Manager for the NPA, Yaro Kasambata, “The 412 million cedis is the ball that NPA is keeping its eye on now”.
“I am privy to other debts such as the FX (foreign exchange) losses but that is not what this process is committed to resolving…we are using over recoveries on the world market price to pay under recoveries” Mr. Kasambata indicated.
In a related development, Financial Analyst, Sidney Casely-Hayford has criticized government’s decision to reduce the price of fuel products by 10% insisting that the products could sell at 50% less than current prices at the fuel stations.
Mr. Casely-Hayford said it is unlawful for the government to continue to let the taxpayer pay for the debt owed to BDCs while at the same time charging 53% in taxes on the ex-pump price of petroleum products.
“If the price of crude did not change…who will pay the BDCs? How would the BDCs be paid? And what will happen to that balance [liability] that you [government] are so concerned about?”
In his view, “the government would have to pay because it is collecting citizens’ money in the forms of taxes, levies and margins and it is supposed to use that to defray the cost of that”.