BOST loses $ 2 million a month

Company News from Saturday, May 4, 2019

Source: Graphic.com.gh

2019-05-04

Bulk Oil Storage & Transportation Ltd. (BOST) has lamented an incredible loss of $ 2 million a month due to transportation losses.

The company therefore claims to rehabilitate its river vessels to pave the way for the resumption of the transportation of petroleum products by water, as of July 1, 2019.

River vessels operate primarily on Lake Volta, and the resumption of their operations would help the state-owned strategic oil company to minimize transportation losses and reduce transportation costs.

Mr. George Okley, Managing Director of BOST, said the initiative was aimed at maximizing the company's revenues from the transportation of products.

Speaking about stakeholder engagement with oil transporters in Accra, Okley said transit losses cost BOST about $ 2 million a month.

Transit losses, he said, often result from different factors, some of which have sometimes penalized some drivers, hence the need to create a platform "where we can all share ideas and find common solutions to the challenges we face ".

He expressed the hope that the new policy reforms would provide BOST with the revenue needed to maintain the country's strategic stock.

Similarly, Mr. Okley stated that as part of its commitments, BOST would like to retain about 5% of the profits made by carriers, as the company currently derives no revenue from its transportation of products via road vehicles in bulk. .

"Given that such policies could create apprehension that can lead to problems, it has become necessary for us to commit ourselves to ensure that the terms and conditions that would be developed with carriers are mutually beneficial," said Mr. Okley.

Importance

The stakeholder engagement sought to solicit carriers' views on the company's new policies, such as pipeline transportation, and how carriers could also seize the opportunity to stay in the pipeline. business.

It has also been used to discuss the need for a product billing regime to allow for proper tracking of products in transit.

Pipeline development

The BOST general manager said that the pipeline being the cheapest mode of transportation of the products, BOST had started the process of replacing the lines of the Accra Plains Depot depot near Tema at Akosombo, launched about 12 years.

"The main objective is to invest in one of the largest pipelines, from the Akosombo depot to the Kumasi depot, and if this project succeeds, it would mean that BRV activity would slow down, hence the need for involve stakeholders in the sale. and become a partner by taking stakes in the project to stay in business, "Okley said.

He has already indicated that Amandi Holdings, the company that won the 2016 bid for the reconstruction of Tema-Akosombo pipelines, undertook feasibility studies and also hired private individuals and companies whose structures were within the limits of the right of way.

Transport application

With regard to new carrier licenses, Mr. Okley stated that BOST receives at least 10 requests per day for the transportation of products on its behalf.

However, he said, the majority of applicants had no financial investment to undertake the business, "so most of the time, when applications are approved, you see these applicants transfer the license to companies with the necessary logistics to carry out the transport on their behalf ".

He stated that carriers often had to have at least 10 BRV trucks, a tank truck fleet and any other necessary logistics, as they often carried at least 45,000 liters of product.

"In order not to saturate the market where the players themselves might end up losing the market, the discussions with carriers have been that the process should be simplified before new carriers can get permission to enter the market. market, "Okley said.

The carriers

The Executive Secretary of the Tanker Owners Union, Mr. Ignatius Koku Doe, congratulated BOST for instituting the quarterly commitments which, he said, had given the oil transport sector some reason.

He felt that in the past, BOST often imposed such ad hoc policies on carriers without the necessary commitments.

"However, this new approach in which all members of the union, including drivers, are engaged to be part of the deliberation process must be welcomed," he said.

In his opinion, the billing system was a policy that, according to carriers, could be a panacea for transit-related losses, which often disadvantaged their members, and promised the union's support for the new provisions.