Business News of Wednesday, 6 December 2017
Former Power Minister, Dr. Kwabena Donkor, has called for the restructuring of the premix fuel distribution strategy following the massive premix fuel diversion uncovered by the National Petroleum Authority (NPA).
Commenting on the scandal to Citi News, Dr. Donkor said the NPA was not proactive enough in dealing with initial reports of the diversion.
The Pru East MP said the NPA “should have cracked the whip” when it first became aware of the mismanagement and corruption in the premix distribution chain.
According to letters written by the NPA and cited by Citi News, over 200 cases of premix fuel diversions took place since January 2017.
“The NPA is the regulator. It has the authority to crack the whip. Defaulting OMCs and their collaborators should be brought to book. But more importantly, as a nation, going forward, we need to take a second look.”
“Immediately it reared its ugly head, the NPA should have dealt decisively with it, and I will encourage the NPA to crack the whip irrespective of who is involved. We are allowing partisanship to override the national interest and I am extremely passionate about this.”
In 2016 for example, $45 million was spent on premix fuel subsidies, and Dr. Donkor stressed that “it is our [tax payers’] money that is going to waste,” hence the need for the reforms in the distribution chain.
“Subsidies are important, but they must be properly targeted and the right beneficiaries should be served. We can develop a mechanism that will ensure that at least 90 percent of whatever is designated to the fishing community gets there.”
In the diversions cited, the products ended up staying in the Greater Accra Region, though the product was documented to go outside outside the region.
“Fishermen in my constituency now have to buy regular fuel, and then buy engine oil to mix it to degrade it to the level that the outboard machines use because they can’t get premix,” Dr. Donkor lamented.
About 14 Oil Marketing Companies found culpable in the scandal have been banned and will no longer receive premix fuel supplies from the National Premix Fuel Committee.
The Ministry of Energy, Ministry of Fisheries and Aquaculture Development, NPA and the National Premix Fuel Committee, after an emergency meeting over the scandal, came out of with a six-point resolution, to ensure that all premix fuel outlets in the country will be reviewed for compliance with standard requirements.
Before this, premix fuel guidelines were revised in 2009, and a new National Premix fuel committee constituted in the wake of concerns with the diversion of the product.
Since the start of the distribution of the subsidized premix fuel in 1990, the government in 2008 noted that, the policy had been plagued by a proliferation of premix fuel sale points owned by individuals rather than the fisher groups, uncontrollable corruption in the premix fuel administration, rampant diversion of the product from the intended destinations, and the adulteration of regular petrol with diverted premix.
There was also a general discontent among fisher-folk identified, hence the reviewed guidelines and restructuring of the National Premix fuel committee.
The original idea of the policy was to ensure the timely availability of the product to the fisher-folk at affordable prices.
It was also to empower the fisher groups to run the premix fuel sale point at the landing beaches, and use the proceeds to develop their communities and themselves.