Business News of Tuesday, 26 February 2013
The debt-ridden Tema Oil Refinery will soon be freed from the shackles of government control and allowed to price the oil it refines, Minister for Energy and Petroleum has hinted.
Mr. Emmanuel Kofi Buah says the cycle of borrowing and under-recovery at TOR, which is the result of governments’ failure to fulfill their commitments to the refinery in terms of paying for subsidies was unsustainable.
He was speaking on Joy FM’s Super Morning Show Tuesday about the mountain of debt which the refinery is now reputed for.
TOR, he said, must set realistic prices for its products in order to break the cycle of debts and inefficiencies.
“TOR will have to be efficient, set its own prices and be competitive,” he emphasized.
Government has been blamed for causing the spiraling debt which has crippled the refinery because successive governments for political expediency, have made TOR set prices artificially low, often with the promise of reimbursing the refinery.
But government never redeems its commitments putting TOR in financial distress.
Mr. Buah says that situation will change when refurbishment of the only refinery in the country is complete and production resumes.