Ghana’s strategic oil reserves depleted since 2006 – BOST MD
Ghana’s strategic petroleum reserves, vital for ensuring oil supply during emergencies, have been non-existent since 2006, according to Edwin Alfred Provencal, the Managing Director of the Bulk Oil Storage and Transportation Company (BOST).
Strategic petroleum reserves are emergency stockpiles of crude oil carefully set aside to mitigate potential disruptions in supply. Mr. Provencal highlighted that the country halted the stockpiling of crude oil following the removal of the strategic reserve levy in 2006, which had been solely dedicated to financing these reserves.
Speaking on JoyNews PM Express Business Edition, the BOST Managing Director emphasized that the country’s current oil storage only constitutes inventory, rather than strategic reserves. He elaborated that the existing petroleum products in tanks are not funded as strategic reserves, as no one is actively contributing to their maintenance.
“The strategic reserve levy, intended exclusively for strategic reserves, has been zeroed out since 2006, courtesy of the NPA and the government in power at that time. Consequently, nobody is funding the country’s strategic reserves. Instead, we depend on inventory in monitored tanks to avert immediate supply shortages,” stated Mr. Provencal.
As Ghana grapples with the absence of strategic oil reserves, BOST’s responsibility is to ensure a sufficient inventory reserve to sustain the nation’s energy needs. Nevertheless, Mr. Provencal underscored the urgency of initiating a critical discussion on reinstating strategic oil reserves and devising a financing mechanism for the same.
“It is imperative for our nation to engage in a candid conversation regarding the imperative of restoring strategic oil reserves, especially in times of disruption. We need to address how we can finance such a project effectively,” he emphasized.
Labeling strategic reserves as akin to an insurance policy, the BOST Managing Director highlighted that it is essential for all stakeholders, including policymakers, to explore optimal ways of funding these reserves to safeguard the country’s energy security.
Ghana’s current predicament demands decisive action to reinstate strategic oil reserves, a safety net vital for insulating the nation against supply shocks and ensuring energy stability.
