The Ghana Chamber of Bulk Oil Distributors (CBOD) is unimpressed by what it believes in an invasion of the petroleum resource sector by foreigners.
According to the Chamber, the development is being fueled by the National Petroleum Authority through its failure “to revise its licensing requirements to conform with the Ghanaian Content and Ghanaian Participation Policy for the Petroleum Downstream as finally approved by Cabinet in March 2019.”
A petitioned to the Energy Ministry, CBOD explained that the future of the downstream sector remains bleak if the canker continues while recommending that the “policy and regulatory actions, in respect of our petition, will preserve the President’s aspirations of delivering the commanding heights of our economy to Ghanaians.”
CBOD Chief Executive, Senyo Hosi and Board Chair, Ivy Appiah Owusu who signed the statement insisted that the “continuous abuse of the Policy by the NPA is endangering the long-term sustainability of the OMC and BDC subsectors.”
They believe this amounts to a betrayal of the confidence and trust of the industry.
“It must be noted that the effect of the policy is not necessarily dependent on the passing of a Legal Instrument but rather the administrative act of the NPA Board to revise and specify the licensing requirements.”
The Chamber also highlighted that the policy outlines provisions on the Ghanaian content requirements for various activities in the petroleum downstream including the trading and shipping of crude oil, Oil Trading, Bulk Oil Distribution, Oil Marketing and retailing of petroleum products at the retail outlets among others in the domestic market which are supposed to be reserved for licensed companies with 100% Ghanaian ownership.
Read the full statement below:
As you are aware, the indigenous players in the industry have evolved from kerosene resellers and agents of international traders to become successful entrepreneurs in the BDC, OMC and Storage sectors of the industry.
You are also aware of the many desperate attempts by international traders seeking to integrate forward by becoming OMCs and BDCs to stifle the growth and backward integration of indigenous Ghanaian companies. Nurturing the forward integration of IOTs through the non-enforcement of the Ghanaian Content and Ghanaian Participation Policy, will make it impossible to build Ghana’s own British Petroleum, Sahara, Vitol, Trafigura or Glencore. You may recall that when IOTs had an oligopoly on product supply in Ghana in the early 2000s, supply premiums were pegged at $105/mt but today, under indigenous BDCs, consumers pay supply premiums below $60/mt.
As a matter of fact, through minority partnerships and golden shares by these IOTs, indigenous BDCs will be outcompeted to create an oligopoly run by IOTs in Ghana. We are certain that Ghana shall suffer pricing abuse under this phenomenon and will be heavily exposed on its product security. Posterity will not judge your regime right should this happen on your watch.
The continuous abuse of the Policy by the NPA is endangering the long-term sustainability of the OMC and BDC subsectors of the industry and betraying the confidence and trust of the industry.
It must be noted that the effect of the policy is not necessarily dependent on the passing of a Legal Instrument but rather the administrative act of the NPA Board to revise and specify the licensing requirements.
This is captured in section 14 of the NPA ACT691 which states “A licence shall not be granted to an applicant unless the applicant has complied with any other requirement specified by the Board and any other relevant enactment.”
The inclusion of indigenous ownership has long been a licensing requirement for persons intending to participate in the downstream petroleum sector. The nature and extent of such indigenous inclusion have always been published by the Regulator by way of public notices and not Legislative Instruments. Section four (4) of the NPA ACT subjects the NPA to the policy direction of the Minister.
With the policy passed and legitimised by the cabinet, we respectfully hold the view that the NPA has acted and continues to act in breach of the law and policy. H.E. Nana Akufo-Addo, President of the Republic of Ghana, in a speech said, “We shall measure our progress by the happiness which our people take in being able to manage their own affairs.”
It is our humble expectation that policy and regulatory actions, in respect of our petition, will preserve the President’s aspirations of delivering the commanding heights of our economy to Ghanaians.
This will assure that the public commitments of the President in this regard will not be mere Speak-of-Poetry acted by Prose. We will, therefore, take all necessary steps, including legal interventions, if necessary, to compel the NPA to comply with the directive and render null and void any licence issued in breach of the approved policy since its passing in March 2019.
If any notice is required under Ghana law of our intention to engage other levers of government to compel fidelity to the law as contained in the Ghanaian Content and Ghanaian Participation Policy, consider this as that notice. We count on your genuine commitment to Mother Ghana, to do what is not just in the myopic interest of a few but rather that which sets Ghana stronger for the future.
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