Petroleum products consumption growth up by one-sixth
Adnan Adams Mohammed
The petroleum downstream sector saw a 15 percent surge in consumption of petroleum products during 2018 under review.
The National Petroleum Authority (NPA) has reported that, consumption of petroleum products in the downstream sector grew by 15 percent (one-sixth) in 2018. According to the Authority, petroleum product consumption recorded 3.9 million Metric tons in 2018 more than the 3.4 million Metric tons recorded in 2017.
The growth can be attributed to efforts put in place to curb illicit fuel activities, supported by technology-based schemes and policy initiatives by the NPA despite the many challenges the petroleum industry faces.
Hassan Tampuli, the Chief Executive Officer of NPA speaking at the third edition of the Ghana International Petroleum Conference (GhIPCon) 2019 said, the Authority achieved this success in spite of the challenges of “smuggling via unapproved offshore routes, dumping of Gasoil declared for sale to foreign vessels at local filling stations, under-declaration and non-declaration of products lifted at depots; diversion of subsidized social products such as premix fuel, as well as fraudulent freight claims from some transporters and siphoning LPG from BRVS into surface tanks at illegal LPG tank”.
These “nefarious activities” he added, cost Ghana “about US$200million per annum of tax revenue; compromising on product quality at filling stations due to laundering which leads to damage to vehicle engines; and distortion of the national consumption statistics (over 300,000Mt of actual annual consumption was unreported).
According to data from the NPA, petroleum sector had contributed over GHC86 billion to Ghana’s GDP representing an average of about 8% per annum in the period 2013 to 2018.
However, the Unified Petroleum Price Fund (UPPF) has also recorded about US$12million losses per annum.
To tackle some of the stated challenges, Mr. Tampuli noted that, the NPA had “rolled out a series of measures to tackle the problem heads on, in collaboration with the Ghana Revenue Authority, Ghana Navy and other relevant security agencies in the country”, and intensified “digital solutions such as Enterprise Relational Database Management Software, Petroleum Products Marking Scheme and Bulk Road Vehicle Tracking project”.
Mr Tampuli urged “participants to use this GHIPCON platform to deliberate on the key issues” in the petroleum industry with a “focus on the strategies” needed “in order to achieve the vision of being ‘A Catalyst for Transformation’ together” in line with this year’s theme.
He also assured participants that “the key recommendations” from the conference “will be taken on board in efforts to ensure efficiency in the Ghana petroleum downstream industry”.
The Vice President Dr Mahamudu Bawumia on his part said the petroleum downstream sector had witnessed a significant expansion following the government’s deregulation policy.
“This sector has witnessed significant investment and expansion of petroleum products storage and outlet facilities,” he said.
“The investment has been championed by the private sector which is mostly dominated by a growing number of indigenous Ghanaian companies.
“For instance, over the past eight years, the industry has grown from a total of eight (8) Bulk Distribution Companies (BDCs) to 35. The number of Oil Marketing Companies (OMCs) has grown from eight one (81) to one hundred and fifteen (115)”.
Dr. Bawumia also mentioned as at May 2019, there were 19 companies providing support services for the sector in areas such as tank calibration, underground storage tank (UST) and Above Storage Tank (AST) cleaning, Non-Destructive Testing (NDT), amongst others.
The Deputy Minister of Energy, Dr. Amin Adam said government through the Energy Ministry and NPA was taking steps to focus on transforming the petroleum downstream sector from its present state “towards government’s vision of making Ghana a hub for refined petroleum products in the West Africa region.”