$24M Revenue Loss Hangs Over TOR’s Neck – IES

The Tema Oil Refinery (TOR) is to lose about 24 million dollars in revenue due to drop in global prices of refined products.

This is the assertion of the Institute of Energy Security (IES).

The energy think tank attributes the development to an ineffective business model despite producing refined products.

The imminent loss follows the Tema Oil Refinery’s processing of 950,000 barrels of crude purchased from Nigeria, in October 2018.

This led to the production of some refined products such as diesel, atk, LPG, atmospheric residue which is further refined to obtain gasoline.

However, the absence of buyers has left most of the products in tanks.

The IES says even if TOR decides to sell off its products, it will have to do so at the prevailing prices where global prices have dropped.

“It’s largely due to the fall in crude oil price as well as fall in price of finished products since Bill of Laden was tendered to them in 16th October. And as the products keep sitting in tanks, oil prices keep dropping so the loss gets worse with every passing day,” Executive Director of the IES, Kwasi Anamuah Sakyi said.

The total amount for the crude imported from Nigeria is about 80 million dollars which TOR is expected to repay with the lower cost for its refined products.

Meanwhile IES wants the government to intervene and regulate the subsequent purchase of crude by TOR.

“We call for the government’s intervention to ensure that this kind of loss that is in the offing dose not recur and also TOR is stopped from trading by itself since it hasn’t gotten the capacity to do that. It is important for us as a country that we don’t incur more losses to add unto the energy debts we have on our hands,” he added.