Gov’t clears $1bn legacy debt owed Bulk Oil Distributors from 2011-2015 – Senyo Hosi confirms

Government has completed payments of all legacy debts due the Chamber of Bulk Oil Distributors, CBOD, according to the Chamber’s CEO, Senyo Hosi.

A statement from the Chamber to Citi Business News said the government made payment to the tune of one billion dollars as at January 13, 2020.

According to the bulk oil distributors, the debt which accrued for four years; between July 2011 and July 2015, was estimated at 1.43 billion dollars.

But the BDCs agreed to a haircut, which is a slash of 432 million dollars, leaving about 1 billion dollars to be cleared via an agreed payment plan with the government.

Breakdown of the haircut agreed by BDCs and the government

Together with the interest, the amount that had accrued was however capped in March 2018, which means that beyond this point, no new amount was calculated on neither the actual amount nor interest.

The highest of the three components of the debt was the Forex Loss Under-Recovery (FLUR) which refers to the loss incurred by BDCs as a result of the differentials between the forex rates set by the National Petroleum Authority (NPA) for pump prices, and the rates at which FX rates were supplied by the Bank of Ghana on behalf of Government.

This component was 806.25 million dollars.

It was closely followed by Forex Loss Under-Recovery Interest (FLURI) which is the interest accrued on the delayed payments of forex loss under-recoveries; at 99.67 million dollars.

Also, the Real Value Factor which is the interest accrued on the delayed payments of price under-recoveries, stood at 97.16 million dollars.

The payments were done in three forms; cash, Bank of Ghana as well as Energy Sector Levy bonds.