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Why We Have Fuel Shortage   
 
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10-Jul-2009  
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Ghana has been hit by fuel shortages, which only Government and the Tema Oil Refinery were denying until Wednesday. In May, the country ran out of performance fuel, like V Power, forcing people to park their vehicles.

This week, it has hit all car owners as long fuel queues meet President Obama’s pending visit. TOR says about eight of about 40 Oil Marketing Companies owe it money so it has refused to supply it fuel. That excuse was found out to be untenable.

Then TOR came out to say that they needed to do some repair work on the Residual Catalytic Cracking Unit of the refinery, which was shutdown for six months for regular maintenance, had to be shut down again, temporarily. But, The Statesman can again report that this is not exactly the case. The truth is that Nigeria has still not supplied us with crude oil. And, the reason is a six-month battle on which company should have the contract to lift crude oil from Nigeria to Ghana. Sahara Oil has for the past eight years been lifting oil for Ghana. But, the National Democratic Congress was determined to discontinue this arrangement went power changed hands in January.


Tsatsu Tsikata, the unofficial Oil Czar of Ghana, attempted in the first quarter of the year to get Ghana National Petroleum Corp. to resume its 1990s extra duty of lifting oil. Nigeria said that would not do. Sahara’s contract had come to an end, but, like had been the practice, they expected them to be allowed to continue to lift oil for Ghana before a new tender bid is done and a new contract issued. But, Mr Tsikata and the NDC government said, ‘No way!’. The Nigerians also said no way because the Nigerian law stipulates that there has to be local content aspect of a company that is allowed to lift oil from its shores. GNPC is 100% Ghana government-owned.

So there was a stalemate. Vice President John Mahama was quickly dispatched to Libya, a country, which, allegedly, through the machinations of Kojo Tsikata, gave heavy financial, logistics and personnel training support to the NDC in the 2008 general elections. Mr Mahama had very little success. The government had no choice but to go back to Abuja like a prodigal son.
This time, the President himself had to make that trip. In fact, just as negotiations were still ongoing, Presidential Spokesperson, Mahama Ayariga and Deputy Information Minister Agyenim Boateng were on air reporting to Ghanaians that President Mills had secured a 90-day credit line deal which will see Nigeria supplying to Ghana more oil than Ghana needs.


But, sources in Abuja said the deal was yet to be communicated to the technical people to complete. When it got to them the issue of who should lift the oil still became the sticky issue. This time, the Ghanaian government had shifted form GNPC to Vitol, John Taylor’s company which controlled the multi-million dollar lifting business before 2001. By Wednesday night, negotiations were still on going. But, the Nigerians did not seem to be bulging on their stance that a Nigerian company must do the business. TOR believes the shortages will be no more by Friday, in time for a petrol queue-less Obama’s visit.


Meanwhile, Joy Business News' senior journalist, Israel Laryea, says the problem could partly be attributed to the unwillingness of the oil marketing companies to import crude oil because the price on the Ghanaian market is not lucrative enough. "They are hesitant to import the products because they are not happy with the price of the product, it is not profitable." In a press statement yesterday, the opposition NPP reminded Ghanaians that rampant fuel shortages and the associated long queues at fuel stations “were so common under the previous NDC administration before 2001” and are re-emerging under the current NDC administration. They reminded Ghanaians that “Between 2001 and the close of 2008 when the NPP managed this country, fuel shortages and long queues at fuel stations became a thing of the past. The return of this phenomenon in national life is most unacceptable.”


The NPP told the NDC government to fix the problem because “the daily bread of drivers, car-owners and their dependants lean on the ready availability of petroleum fuel.” The NPP warns that “With the return of fuel shortages, many ordinary Ghanaians would suffer. Industries that use fuel directly would cut back on production for lack of fuel, causing workers to lose their jobs and their livelihood. The adverse effects of these shortages on the social and economic lives of people are really harsh.” “At a crude oil price of US$64 per barrel, we are buying fuel at an average price of GH¢5.00 per gallon. This compares with an average price of GH¢5.20 per gallon a year ago when crude oil price was US$147 per barrel,” the NPP said.
 
 
Source: Statesman
 
 

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