The Ghana Chamber of Bulk Oil Distributors (CBOD) has announced that Bulk Oil Distribution Companies (BDCs) are exploring opportunities to acquire equity stakes in the Tema Oil Refinery (TOR). The initiative, spearheaded by CBOD CEO Dr. Patrick Ofori, aims to partner with the government in revitalizing the state-owned refinery, enhancing its operational efficiency, and reinforcing its role in Ghana’s energy sector.
Speaking on PM Express on December 19, Dr. Ofori emphasized the refinery’s critical role in Ghana’s economy, describing TOR as a “key national asset” that urgently requires investment and structural reforms. He highlighted the BDCs’ capacity to mobilize partnerships and investment capital to bring TOR back into full operation.
“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”. Dr. Ofori said.
Dr. Ofori underscored that TOR has demonstrated profitability in the past when adequately funded and managed. However, systemic challenges, including government subsidies and the inability to recover production costs, have hindered its performance.
“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.
The BDCs propose a public-private partnership model to introduce efficiency and accountability into TOR’s operations. Key elements of their strategy include:
Financial Liquidity: Leveraging Letters of Credit (LCs) to reduce credit risks and secure reliable cash flow.
Infrastructure Modernization: Investing in advanced monitoring systems, refining technologies, and supply chain management to optimize production.
Streamlined Stakeholder Engagement: Reducing dependence on multiple Oil Marketing Companies (OMCs) by working with a smaller, more reliable group of stakeholders.
Dr. Ofori called on the government and stakeholders to embrace this collaborative approach, which aligns with global trends of private-sector involvement in state-owned energy assets.
With investment from BDCs and a focus on efficiency, TOR could regain its position as a leading player in Ghana’s energy sector. This would reduce dependency on imported refined products and provide significant economic benefits through local production and export opportunities.
The proposal underscores the potential for TOR to become a linchpin in Ghana’s energy strategy, fostering growth and stability in the sector.
