Ghana has zero strategic oil reserves – BOST

Source The Ghana Report

The Managing Director of the Bulk Oil Storage and Transportation Company (BOST), has disclosed that Ghana does not have any strategic oil reserves.

According to Edwin Alfred Provencal, the country halted the stockpiling of crude oil following the zeroing of the strategic reserve levy in 2006.

Strategic petroleum reserves are emergency stockpiles of crude oil set aside to ensure supply in the event of a disruption.

For example, the United States has underground tanks in Louisiana and Texas that have the capacity for 714 million barrels (113,500,000 m3) to mitigate future supply disruptions. 

Mr. Provencal noted that what the country currently has is inventory reserves.

“Every time I’m asked do you have strategic reserves, what I say is that we have inventory. I don’t call that inventory reserves. So I have petroleum products in my tanks but they’re not strategic reserves. Why? Because nobody is paying for strategic reserves.

“The strategic reserve levy which is meant solely for strategic reserve has been zeroed out since 2006 – by the NPA obviously, the government in power then and so nobody is paying for the country to hold strategic reserves. So what we depend on is the stocks in tanks that are monitored in tanks by NPA to ensure that at least at any particular point in time we’re not running out,” he said.

He explained that the country currently does not have the funds to pay for a strategic oil reserve thus BOST is tasked with making sure there is enough inventory reserve to keep the country running.

He noted that the country must open discussion on the need to restore the strategic oil reserves in the event of a disruption and how to finance such a project.

“The nation needs to have a certain conversation and that conversation should lead to how we’re going to finance our strategic reserves. It’s a very critical conversation. If you ask me does Ghana need strategic reserves I say yes, Ghana needs strategic reserves.

“If you ask me whether a for-profit company buying, going to take a loan from the bank to keep petroleum products for the nation I’ll say no, we can’t do that. Because the strategic reserve is like an insurance policy, you and I who benefit from the insurance policy need to finance that reserve.

“How to finance it is a discussion that needs to be had by the policyholder and various stakeholders to find an optimal way of financing those reserves,” he explained on Joy News monitored by the Ghana Report.


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