Mr. Edwin Provencal, BOST MD

The Bulk Oil Storage and Transportation company limited (BOST) has outlined its corporate strategy that will make it generate more revenue for the state in the coming years after making GH¢161 million profit in 2021.

Key tenets of the strategy include ensuring stakeholder satisfaction, reducing turnaround time, improving asset utilisation and increasing revenue.

The Board Chairman of the state-owned firm, Mr. Ekow Hackman, is confident that the company is on the right footing to achieve its goals due to the strong foundations, which have been laid in recent years.

Mr. Ekow Hackman, BOST Board Chair

“Key strategic initiatives that have commenced include the depots upgrade project, whose completion will place BOST on par with other terminals which have state of the art equipment, and will establish the company as the market leader nationwide”, he indicated.

Another one, Mr. Hackman added, is the Tema to Kumasi petroleum pipeline, where BOST is seeking a suitable development partner to deliver the project. When completed, it is expected that transportation revenue will become the number-one income stream for the company.

BOST also intends to construct LPG tanks at Tema, Kumasi, Takoradi and Buipe as new activities to boost its revenues while supporting government efforts to create jobs for the youth.

Mr. Hackman announced these at the first Annual General Meeting of BOST in Accra. 

GH¢161 million profit

BOST grew its profits to GH¢161 million in 2021 from a loss of GH¢291 million in 2020.

The state-owned firm had made consecutive losses over the past 10 years and was saddled with more than US$624 million debt as at January 2017.

However, as a result of prudent management under its current Managing Director, Mr. Edwin Provencal, BOST has been able to pay about 90% of the debt at the end of 2021.

The 2021 annual report of BOST indicated that the strategic petroleum products storage and distribution company’s turnaround was propelled by significant improvement in its core business with an overall increase in petrol and diesel sales revenue of 83 percent.

According to the report, revenue from gasoline (petrol) sales increased by 144% from GH¢140 million to GH¢341 million; with gasoil (diesel) sales also increasing by 46% from GH¢227 million to GH¢331 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,” BOST Board Chair, Mr. Hackman noted.

One such initiative, he 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”, he stated.

Revenue growth

BOST also grew its revenue from areas such as marine transportation business, which went up 412% from the previous year’s revenue of GH¢2.9 million to GH¢14.9 million.

This 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 GH¢50.4 million to GH¢52.6 million.

In addition to returning to profit, Mr. 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.

Right leadership

Minister for Energy Dr. Mathew Opoku Prempeh noted that the change in fortunes of BOST demonstrates that with the right leadership and management 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 GH¢150 million net income”, Dr. Prempeh said.

He said of the US$611million paid from the US$624 million debt in 2017, US$423 million came from the company’s internally generated funds.

Dr. Prempeh 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 GH¢538 million in 2016 with a staff strength of 349 to GH¢212 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”, he added.

Detractors warned

The Minister for Energy who is also the Member of Parliament (MP) for Manhyia South assured the management of BOST of government’s determination to kick 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 inefficiency gets restored, unsubstantiated allegations and calculated mudslinging are the obvious weapons.

“Government is aware of the turf-war to get the company derailed, and we are not falling for those to engage the reverse button”, Dr. Prempeh stressed.