BDCs Express Interest in Revamping TOR through Equity Stake Ownership
The Chief Executive Officer of the Ghana Chamber of Bulk Oil Distributors (CBOD), Dr. Patrick Ofori, has revealed the interest of Bulk Oil Distribution Companies (BDCs) in acquiring equity stakes in the Tema Oil Refinery (TOR).
This initiative aims to support the government in revitalizing the state-owned refinery and boosting its operational efficiency.
Speaking on PM Express on Thursday, December 19, Dr. Ofori emphasized the strategic importance of TOR to Ghana’s economy, describing it as a critical national asset that requires urgent attention.
He noted that the BDCs possess the necessary partnerships and investment capital to bring TOR back online, enhancing its production capacity for both local supply and exports to neighboring countries.
“There are certain key strategic assets in this country that need to be revitalized, one such strategic asset is TOR. And this is where I throw a challenge to the incoming administration, I have spoken with some BDCs who have said they are willing to join forces and partner with the government to revamp TOR and own stakes in TOR.
“The BDCs have the right partnerships and are ready to make the right kind of investment to bring TOR back onstream and ramp up production levels for in-country supply and even exports to neighbouring countries thereby helping to generate the much-needed foreign exchange to support the Cedi,” he noted.
Historical Profitability of TOR
Dr. Ofori underscored that TOR has previously demonstrated profitability when provided with adequate support and management.
He referenced periods when financial facilities enabled the refinery to operate efficiently. However, challenges such as subsidies and an inability to charge for production costs during certain periods have hindered TOR’s potential.
“The losses incurred by TOR were not because the refinery was inherently unprofitable but due to systemic issues, such as being denied the ability to charge for production costs during the era of subsidies,” he explained.
BDCs’ Investment Strategy
The BDCs propose a model where private partnerships with the government can introduce efficiency and accountability into TOR’s operations.
By leveraging Letters of Credit (LCs) and limiting credit risks, TOR’s financial operations could be streamlined.
“With a smaller group of reliable stakeholders posting LCs, TOR’s financial liquidity can be secured, avoiding the pitfalls of chasing overdue payments from multiple Oil Marketing Companies (OMCs),” Dr. Ofori noted.
Dr. Ofori also stressed the importance of modernizing TOR’s infrastructure. Investments in advanced monitoring systems, supply chain management, and refining technologies are vital to ensuring the refinery operates at optimal levels.
With a renewed focus on partnerships, investment, and structural reforms, the BDCs’ proposal offers a pathway to revitalizing TOR.
By addressing inefficiencies, introducing modern technologies, and leveraging private-sector resources, TOR could reclaim its status as a key player in Ghana’s energy sector, contributing to the economy and reducing dependency on imported refined products.
