According to 2021 annual report, the Bulk Oil Storage and Transportation company limited (BOST), made a profit of GHC161 million in 2021.
According to the BOST’s Board Chairman, Ekow Hackman, the state-owned firm made consecutive losses over the past ten years and was saddled with more than US$624 million debt as at January 2017 – which has been defrayed by more than 80% to less than US$30 million at the end of 2021.
“The strategic petroleum products storage and distribution company’s turnaround was propelled by a significant improvement in its core business with an overall increase in petrol and diesel sales revenue of 83 percent,” BOST’s Board Chairman, Ekow Hackman said.
According to the report, revenue from gasoline (petrol) sales increased by 144 percent from GHC140 million to GHC341 million; with gasoil (diesel) sales also increasing by 46% from GHC227 million to GHC331 million.
“This increase was the result of improved financing arrangements for petroleum products, as well as effective customer engagement and retention initiatives to improve the company’s market share.”Ekow Hackman
One such initiative, Mr. Hackman added, led to the securing of new export customers in Mali. “It’s worth noting that 20% of product sales revenue was from this new export market”.
Revenue growth was also realised from areas such as marine transportation business, which went up 412% from the previous year’s revenue of GHC2.9 million to GHC14.9 million, which was mainly due to full deployment of all the company’s four barges after extensive renovation. Storage and rack revenue also saw a steady growth of 4% from GHC50.4 million to GHC52.6 million.
BOST’s Core Business Model
In addition to BOST returning to profit, Hackman said the company’s core business model– to have a number of operational fuel depots placed in strategic parts of the country, linked by a network of pipelines and barges to enable secure and cost-effective delivery of fuel products around the country – has also been restored.
This is expected to sustain long-term growth and profit for the state-owned company.
The Minister of Energy, Dr. Mathew Opoku Prempeh, indicated that the change in fortunes of BOST demonstrates that with the right leadership and management of state-owned enterprises can deliver value while contributing to strengthening government fiscal space.
“The transformation is indeed massive, as evidenced in improved operational efficiency. This is the path to go if we should attain the path of state-owned enterprises contributing to the fiscal policy of government for its national growth and development agenda. Imagine if 100 SOEs each made GHC150 million net income.”Mathew Opoku Prempeh
Internally Generated Funds
Mr. Prempeh disclosed that, of the US$611million paid from the US$624 million debt all through the years, US$423 million came from the company’s internally generated funds. He also commended the company for effective utilisation of BOST margin, a levy on petroleum products to undertake major repairs works; including the decommissioning of 12 out of fifteen 15 decommissioned tanks, revamping four river barges for fuel transport on the Volta Lake, and upgrade of Akosombo jetty.
The rest are upgrade and replacement of loading arms, pumps and valves across all the depots at Buipe-Bolgatanga-Petroleum-Product-Pipeline; Tema-Akosombo-Petroleum Product-Pipeline; and Bolgatanga Petroleum Export Depot among others.
“Comparing figures, I also saw BOST reducing its administrative expenses from as high as GHC538 million in 2016 with a staff strength of 349 to GHC212 million in the year 2021 with a staff strength of 487.
“Genuine administrative costs grow upward and not downward due to factors like inflation among others. I would like to commend management for the prudence that resulted in these massive reductions in the cost of operations. The company is spending less while achieving more for the government and people of Ghana; from the face of the record, this is an impressive performance that the company’s board and management need to be commended for.”Mathew Opoku Prempeh
The Energy Minister assured BOST of government’s support against attempts to derail the progress being made to transform the company.
“I am aware of recent developments in the mass media on BOST, but I am also aware of the political economy around operations of the company. The moment BOST steps up its performance, the avenues for the prosperity of some known private stakeholders become challenged; and in the process of ensuring that efficiency is restored, unsubstantiated allegations and calculated mudslinging are the obvious weapons used against those in charge.”Mathew Opoku Prempeh