Pressure is mounting on government to scrap the Bulk Oil Storage and Transportation (BOST) margin from the petroleum price build-up, as it considers suspending selected taxes and levies to cushion consumers in the next pricing window beginning April 16.
The calls come amid rising fuel prices driven by ongoing Middle East tensions, which continue to exert pressure on global crude oil markets and domestic ex-pump prices.
The latest to join the advocacy is the West Africa Regional Director of CUTS International, Appiah Adomako Kusi, who has been speaking to Citi Business News.
“Taxpayers are financing BOST and I think that BOST has to sit up. If they cannot do their role as a strategic stock or building infrastructure for the downstream sector, I think that we may have to take away the BOST margin forever because we pay this BOST margin for many years and we don’t see what the BOST is doing.
“By now, BOST should have been able to lay pipes from Accra to Kumasi so that as soon as the fuel gets to Tema, they are able to pump it to Kumasi or other parts of the country. If BOST had used the money that we have given them and invested in pipelines, that would have even reduced the cost of fuel transportation and all the associated costs. But BOST is not doing all these things. They are getting this money for free. I think that this is the best time for government to scrap the BOST levy,” he said.
Already, energy think tank Centre for Environmental Management and Sustainable Energy (CEMSE) has called for the immediate removal of margins allocated to the Bulk Oil Storage and Transportation Company (BOST) in the petroleum price build-up.
It argued that BOST now operates as a fully commercial entity and generates adequate revenue from its core services, including storage, transportation, and terminal operations provided to private sector players in the downstream petroleum industry.
Executive Director of CEMSE, Benjamin Nsiah, alleged that the margin has become a source of operational income used for administrative expenses rather than infrastructure expansion and maintenance.
“BOST margin now becomes an operational income… to increase their wages and engage in frivolous expenditure because of the free money that consumers give them,” he said.
The call comes after Cabinet reportedly directed the Ministers of Finance and Energy to implement a temporary suspension of selected taxes and margins over an initial four-week period to ease fuel price pressures on households and businesses.
However, sector think tank the Institute for Energy Security (Institute for Energy Security) has cautioned against scrapping the BOST margin, warning that such a move could undermine fuel supply security and hinder infrastructure expansion in the downstream petroleum sector.
