Captains of Oil Marketing Companies (OMCs) have alarmed that, Ghana’s security is at risk if a cartel of illegal fuel operators continues building wealth.
There have long been allegations that some influential business and political moguls are part of a cartel that smuggles oil to neighboring landlocked countries by redirecting oil meant for export.
The said members of this cartel also import substandard petroleum products – dubbed ‘black oil’ – which are harmful to the environment and engines.
Confirming the existence of the cartel, Chief Executive of the Association of Oil Marketing Companies (OMCs), Kwaku Agyeman-Duah, has said the activities of the cartel creams off more than GH¢1 billion of revenue to OMCs in one year.
“These people are making a lot of money. If you have about GH¢1 billion or GH¢1.2 billion going to a ‘parallel’ industry which is being dominated by a few people they will have so much money they will need to protect the money they have.
“That is where they go with guns. They can buy our security and anybody and it is a seed for terrorist acts,” he stressed.
He revealed that, more than GH¢850 million that should accrue to the state as revenue is lost every year through the operation of this illegal oil business.
“We have to be alert. These things have happened to certain countries and they couldn’t survive…The security officials know these people,” he laments.
He revealed that a complaint lodged to the industry regulator, National Petroleum Authority (NPA), is receiving attention.
In March this year, Deputy Minister of Finance, Kwaku Kwarteng, said Government will wage a fierce war on the cartel, however, per the revelations of Mr Agyeman-Duah, the ‘black oil cartel’ seems to be thriving.
The call by the OMCs CEO comes amidst ongoing controversy surrounding the sale of contaminated fuel to two unlicensed oil companies – Movenpinaa and Zup Oil – by the Bulk Oil Storage and Distribution Company Limited.
The Chief Executive Officer of the NPA, Hassan Tampuli explained that although the two companies were operating without license it has taken the necessary steps to get them regularize their business after sanctions were imposed on them.
“We do not want to sit on economic interests or rights of people but you’ll have to do the right thing, so failure to do so we we will impose a sanction and we’ll still go ahead to register you. So as we speak Zup Oil and Movenpiina’s applications are pending in our office. It is not unusual in the industry. If people think what they are doing doesn’t need a license, but we insist that you need a license so you have to apply for it,” he noted.
BOST has been accused of releasing onto the Ghanaian market contaminated fuel, a development which many fear will damage engines of vehicles and other equipment that operate on fuel.
Following this the Minority in Parliament has demanded the “immediate interdiction” of the Managing Director of BOST, Alfred Obeng Boateng, over the “bizarre” and “dubious” contract awarded to Movenpiina Company Limited to distribute the five million litres of contaminated oil onto the market.
At a press conference, the Minority called for a full-scale investigation by the regulatory authorities into the “corrupt” deal. It has also demanded the recall of the contaminated product from the market to protect consumers and assurances that this will not recur.
“The general motoring public should be rest assured that the off-spec product that we are talking about have not hit the market, the way and manner is being reported. They should be rest assured and then go about their daily duties and not shy away from buying products from any retail outlets. We are on the look out for any possible contamination…but for now we do not have any reason to believe that there is any contaminated product on the market.”
Mr Boakye Agyarko, the Minister of Energy, said the Ministry’s attention had been drawn to the various media reports on the issue of the release of 5 million litres of off-sec fuel from the Accra Plains Depot of BOST.
“We have also received a report of the preliminary investigations conducted by the National Petroleum Authority on the issues.
“We wish to assure the public, that the Ministry is determined to ensure that the integrity of the quality of petroleum products supplied in the country is protected,” Mr Boakye Agyarko stated.
The terms of reference of the Ministerial Committee include but not be limited to the following; determine the circumstances that created the off-sec product and to review the procedures undertaken by BOST to evaluate the product.
The rest are ascertain the quality and remaining quantity of the product, to determine if the product could be corrected, if not determine the alternative use for the product and review the transaction.
The composition of the eight-member ministerial investigative committee includes representatives of the National Petroleum Authority, Tema Oil Refinery, Ghana Standards Authority and the Bureau of National Investigation.
Others are the Chamber Of Bulk Oil Distributors, Association of Oil Marketing Companies, Energy Commission and representative from the relevant civil society organisations.
The committee, which would have a month to submit its report, would also advise the Ministry on the necessary technical, administrative and legal actions to be taken.
The Minister said the Committee would decide on whether the Acting Managing Director of BOST should step aside or not.
BOST has been accused of selling five million litres of contaminated fuel to a private firm for distribution to the pumps, a product industry players say has a high possibility of damaging engines of vehicles and other equipment that operate on fuel.
Commenting on the saga, Mr. Cudjoe said he is not surprised about fuel fraud allegations involving BOST, because the entity has become a drain on the fortunes of government for several years and, therefore, called on the NPP led administration not to allow itself to be duped into believing the company can ever return any real value addition.
He described the company as a huge monster which is not needed at this time in our development, saying IMANI’s extensive study in fuel fraud across Africa reveals willing state actors collaborate with non-state traders to dupe the state.
Mr. Cudjoe said the resolution has always been about the use of technology for fuel marking.
“But persistent crookish tendencies have always upstaged critical and forward looking solutions”.
He also commended the Africa Centre for Energy Policy (ACEP) for a thorough job by “exposing this canker and it is the greatest indication yet of the needlessness of BOST and the amazing deception of its true economic value to the state”.
Meanwhile, legislator for Assin Central in the Central Region, Kennedy Agyapong, has alleged that there is a cartel in the raging contaminated fuel saga.
According to him, this is not the first time that fuel has accidentally been contaminated at BOST, and that over the years the practice has been happening and anytime that happens, some members of the cartel get the opportunity to buy the fuel, process and sell it in the open market.
Also, the Chamber of Petroleum Consumers Ghana (COPEC-GH) has urged authorities to go for taxes and other levies owed the state by BOST in the sale of the contaminated fuel.
BOST sold the contaminated fuel to Movenpinna Energy and Zup Oil to be used by heavy machine users in some industries in Tema.
COPEC-GH wants “immediate attempts by the state to retrieve all taxes and revenues due it in view of the fact the two companies that bought and have already transported the products from the bonded BOST depot to an unbonded location are not in any way licensed to do so”.
COPEC-GH, which has condemned the transaction due to the possibility of the fuel ending up at the pumps, is also calling for immediate “interdiction and arrest of the technical and other officials of BOST together with the two named companies for circumventing due process in awarding and securing an illegal contract as these off-takers clearly have no legal permit to conduct such business”.