BOST explains why it sold contaminated fuel

BENJAMIN XORNAM GLOVER  

27 JUNE 2017

The Bulk Oil Storage and Transportation Company (BOST) has challenged anyone with information on the illegal sale of contaminated or off-spec product at the pumps to report such action to the appropriate authority for immediate action.

A statement from BOST and copied to Graphic Online said a technical team of BOST carried out due diligence and inspected the facility of the off taker and was satisfied that the product released was going to be scheduled to reflect the capacity at any point in time.

“BOST deploys the use of only Bulk Road Vehicles (BVR) that have tracking devices installed and have duly met the requirements of NPA to haul products, thus rendering BOST extremely responsible. Anyone who has a contrary view should provide a credible laboratory report and detail analysis,” the statement said.

Revenue

Responding to a call by the Africa Centre for Energy Policy (ACEP) for the Chief Executive Officer of BOST, Mr. Alfred Obeng Boateng to step aside for a full-scale investigation into the alleged sale of contaminated fuel, BOST defended its decision to sell off the contaminated or off-spec products to Movenpiina saying the move was the most prudent considering the potential loss in revenue.

“BOST sold the off-spec product GH c 1.30p per liter as against the normal ex-refinery rate of GH c1.75p for normal products. Thus 26 percent discount off the normal product and this is normal and acceptable practice in the industry”

“The assertion that, the off-spec product should have been sold at GH 2.50p is misleading because ex-refinery price and pump price are completely different. BOST only sells products at ex-refinery rate. BOST does not sell its products at ex-pump price so those who are quoting same should move away from that assertion,” the statement said.

Status

Touching on the status of oil company, Movenpiina in the whole deal, BOST said nothing prevents an entity from having business discussion with a company which is at a business promotion stage.

The statement said, at the time Movenpiina was engaged by BOST in respect of the off-spec product sales, it had been duly registered with the Registrar General Department.

Options

BOST said the product in question was declared off-spec after going through an in-house technical assessment and a laboratory test by the Tema Oil Refinery adding that after the realisation of the state of the product, BOST, after a thorough analysis and consultation, had three options to deal with the situation.

“The first option is to have a corrective treatment of the off-spec product at TOR but this option was however not possible because TOR is not refining at the moment.”

“The second option was to gradually inject a total of about seventy thousand (70,000) litres of the off-spec product into ten million litres (10,000,000) of normal product over a period which will take about ten (10) solid months for BOST to accomplish. The implication of this option is however the opportunity cost of losing the commercial value of over five million and seven hundred thousand Ghana Cedis (GHS 5,700,000). This arrangement would have deprived the BDCs of getting space to store their products. The capacity of the tank holding the off-spec product is twenty million litres (20,000,000 lts).”

“The third option involves the selling of the off-spec product at a competitive ex-depot price. Comparatively, the possible revenue loss here cannot outweigh the loss in Option 1 and 2.”

“Clearly, OPTION 3 was the ideal from a business point of view,” the statement added.

The statement concluded by saying BOST would ne pleased if ACEP will advice the category of NPA license for such a waste oil dealer.

via: | http://www.graphic.com.gh/news/general-news/bost-explains-why-it-sold-contaminated-fuel.html