Benjamin Boakye, the Executive Director of the Africa Centre for Energy Policy (ACEP), has raised significant concerns regarding inefficiencies and mismanagement within Ghana’s downstream energy sector.
In an interview with Alfred Ocansey on TV3’s The Keypoints on January 11, 2024, Boakye called for urgent reforms to address these issues, with a particular focus on optimizing tax revenue and enhancing accountability in the sector.
One of Boakye’s main criticisms was aimed at the Bulk Energy Storage and Transportation Company Limited (BEST), formerly known as the Bulk Oil Storage and Transportation Company (BOST). According to Boakye, the institution has deviated from its core mandate of maintaining strategic fuel stocks and has instead engaged in commercial activities that directly compete with private sector Bulk Distribution Companies (BDCs).
“BOST was established to build capital and compete internationally while keeping strategic stocks. However, it has shifted focus to commercial operations, which not only competes unfairly with BDCs but also renders them inefficient in global competition,” he explained.
While BDCs have managed to keep Ghana’s fuel supply stable despite challenges like currency fluctuations, Boakye pointed out that government interventions, such as the “gold for oil” policy, have failed to address the root causes of inefficiency in the downstream energy sector. He argued that such policies do not effectively solve the underlying systemic issues.
Boakye further criticized the heavy financial burden the sector places on taxpayers, estimating that nearly GHS 8 billion is drained annually with no tangible benefits. He called out policies that hinder private sector participation, claiming that they are often crafted to serve political interests rather than resolve the sector’s inefficiencies.
“There are ways to maintain strategic stocks without government injecting money into the private sector. However, political systems with inherent weaknesses and inefficiencies continue to justify the existence of BOST, despite its redundancy,” Boakye stated.
In addition, Boakye revealed that ACEP is preparing to publish a report outlining the challenges within the downstream sector, which he described as a “mess.” He underscored the importance of aligning policies to optimize the sector for tax revenue generation, rather than for the benefit of select private interests. The need for transparency and accountability within state institutions was also highlighted.
“If BOST’s purpose is to maintain strategic stocks, and it has failed to do so, then why does it exist?” Boakye questioned, calling for a reevaluation of the company’s role in the sector.
Boakye also highlighted broader implications of the sector’s inefficiencies, particularly how they affect fuel availability and pricing. He warned that a lack of balance in the allocation of resources, such as diesel for power generation and other non-power uses, could lead to shortages that would harm both consumers and businesses.
In conclusion, Boakye called for a shift in focus towards building a resilient downstream energy sector that aligns with national development goals and addresses the needs of both consumers and businesses. His remarks have sparked ongoing conversations about the sustainability and effectiveness of Ghana’s energy policies. Stakeholders are now awaiting ACEP’s forthcoming report, which promises to shed light on the state of the sector and propose necessary reforms.
