26 June 2014

Ghana: Mahama Orders Release of Fuel Funds

Accra — GHANA'S President, John Dramani Mahama, has directed the Finance Minister, Seth Tekper, to release $60 million to the Bulk Oil Distribution Companies (BDCs) to ensure sufficient fuel supplies.

This comes amid the BDCs reportedly withholding supplies resulting in shortages in some cities across the country, including Accra, Tema, Cape Coast and Kumasi.

According to the Information and Media Relations Minister, Mahama Ayariga, the President gave the directive to release funds on Tuesday “to enable the BDCs obtain Letters of Credit so that we can prevent these queues at the filling station while discussion continue with the BDCs on long term solutions.

Ayariga expressed optimism that once the money was released, the fuel situation would return to normalcy.

He gave the assurance that the long term solutions on fuel subsidies would be sought and how to manage foreign exchange losses in the purchase of petroleum products from the international market.

Government is said to owe the BDCs GHC 1,8 billion and as a result, international suppliers of petroleum products have refused to release a week's supply of petrol and diesel until the BDCs honour their debt obligations.

Reports further indicate that local banks have declined to issue letters of credit (LCs) to the BDCs to pay off their debts to their international suppliers because the current debt is threatening the survival of the banks.

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