Business News of Thursday, 25 October 2018
The National Petroleum Authority (NPA) says prices of petroleum products are likely to be reduced in the next pricing window as a result of the appreciation for the Ghana cedi against the US dollar and decrease in the price of petroleum products on the world market.
The Authority says in line with the deregulation policy these positive developments would be passed on to the public through pump prices.
Chief Executive Officer (CEO) of NPA, Alhassan Tampuli announced this yesterday at an Industry Stakeholder Engagement Seminar.
According to him, the Ghana cedi has made some gains against the US Dollar as at yesterday.
Fall prices on world market
In addition, he said the price of diesel and petrol on the world market have decreased by nearly 2 per cent while the price of Liquefied Petroleum Gas (LPG) has also gone down by almost 8 per cent.
93% petroleum product exports to neighbouring countries
He also announced that following the stringent measures instituted by the Authority to curb illegal activities in the downstream petroleum sector, petroleum product exports to neighbouring countries have drastically reduced from 30 million litres in August 2017 to two million litres in August 2018 representing about 93 per cent decline.
This, Tampuli said has resulted in a significant reduction in volumes of exported products that would have been diverted invariable at the expense of the state.
43 Bulk Road Vehicles arrested for illegal activities
“We have, in close collaboration with the security agencies so far arrested and detained 43 Bulk Road Vehicles (BRVs) and one canoe for engaging in all manner of illegal activities. Products on board the arrested vehicles were also confiscated from the owners,” he stated
Committee reviewing guidelines to curb illegal fuel activities.
The CEO said the Authority would ensure relevant taxes and levies were realized and paid back to the government, adding that the cases were being reviewed by a Committee that was constituted in June this year to develop guidelines to curb illegal fuel activities and also propose measures for the disposal of all confiscated BRVs, canoe and the products therein.
Petroleum product marking scheme recorded high failure rates
He, however, stated that as a result of the smuggling of petroleum products as well as dumping of petroleum products meant for export onto the market in recent years, the petroleum product marking scheme recorded high failure rates in 2016 and 2017.
“Specifically, the recorded failure rate among retail stations averaged 6.20% and 4.91 per cent in 2016 and 2017 respectively. It is gratifying to note that, our stringent measures in tackling fuel smuggling among others, has been successful as failure rate has declined to less than 1% as of July this year,” he added.
He assured stakeholders that the Authority was poised to ensure protection was given to the businesses of genuine players.
Cylinder Recirculation Model and safety
Tampuli said even though they were hopeful that the full implementation of Cylinder Recirculation Model (CRM) would ensure safety, they have in the interim collaborated with Oil Marketing Companies (OMCs) and other relevant stakeholder agencies to enhance the capacity of persons involved in the handling of petroleum products, including tanker drivers and their mates.
He added that the Authority had also strengthened its capacity to intensify monitoring and inspection mechanisms, to ensure safety standards at the various stations were rigorously enforced.
This, he said would help reduce and eliminate completely any unforeseen petroleum products related accidents; noting that Risk Assessment of all LPG refilling plants in all the 10 regions have been carried out.
Review of Price Deregulation Policy
Tampuli in his address stated that they would be reviewing the Price Deregulation Policy on the operations of Petroleum Service Providers and areas to be reviewed include competition, cost of operation, service delivery, and pricing methodology.
The Authority, he said was currently collaborating with the Driver and Vehicle Licensing Authority (DVLA) and Road Safety Limited (RSL) to train and certify drivers which would lead to issuance of additional license for hauling of petroleum products.
He indicated that this was part of efforts to improve the safety of transportation of petroleum products in the country.
In addition, the NPA boss indicted that review of the Oil Loss Manual has been completed and copies have been made available to all stakeholders for views and comments.
“It is expected that the manual will improve and ensure accurate reporting of receipt and delivery of petroleum products from the depots,” he stated.
Installation of ATGS and BRVs
The Authority plans to commence the installation of Automatic Tank Gauging systems (ATGs) at all retail outlets in 2019.
These ATGs, according to NPA would be integrated with the Authority’s Enterprises Relations Database and Management Systems (ERDMS).
The NPA Chief also indicated that they intend to commence the installation of electronic sealing and tracking devices on Bulk Road Vehicles (BRVs) without tracking devices and it would also be integrated with the ERDMS.
These measures, he said would provide an effective control and monitoring of petroleum product distribution activities within the Downstream Petroleum Industry.
New licensing for BDCs
Tampuli announced that the Authority was developing a new licensing requirement for Bulk Oil Distribution Company (BDC).
The new licensing requirement, he noted would be in two categories.
He explained that “Category 1 BDC license holders will be authorized to import crude oil as well as procure, store, distribute and sell petroleum products wholesale to Oil and LPG Marketing Companies as per the current scope of the BDC license.
“Category 2 BDC license holders will not be permitted to import petroleum products into the country. They will however, be authorized to procure petroleum products in-tank from the refineries or Category 1 BDC license holders for sale to the OMCs and LPGMCs. Additionally, they will be permitted to market condensates and export petroleum products to neighbouring countries under customs seal,” he added.
Tampuli said the new licensing would ensure that financially distressed BDCs remain in business and honour various financial obligations to the state and banking industry.