CBOD calls for strengthening regulation and the role of the private sector in the oil and gas sector

Author: Kizito CUDJOE

The Chamber of Bulk Oil Distributors (CBOD) has stressed the need for a streamlined and well-regulated oil and gas sector, calling on regulators to continue to explore opportunities to deepen profits from the sector.

The Chamber of Petroleum Oil Distributors (CBOD) has stressed the importance of a streamlined and well-regulated oil and gas sector, calling on regulators to explore ways to increase revenue from the sector.

Stressing the importance of efficiency and cost-effectiveness, the Chamber said there was a need for greater private sector investment in specific operations while the government focused on maintaining a sound regulatory framework and enforcing industry standards.

In this context, CBOD called for a standardized approach to meter installation and calibration, a key element in ensuring accurate metering and billing in the sector. Under the proposed system, meters required by the Ghana Standards Authority (GSA) could be installed by the Depot, the National Petroleum Authority (NPA) or the Ghana Revenue Authority (GRA).

She added that GSA will take responsibility for regularly calibrating these meters.

This method, according to CBOD, is in line with international best practices. By appointing a single body – GSA – to handle meter calibration, the proposal aims to eliminate unnecessary efforts by multiple entities that often result in additional costs for consumers.

“GSA’s role in ensuring and maintaining standards is in the state’s best interests. All regulations in this sector should ultimately serve the national interest and be subject to state/regulatory oversight,” said a statement issued by CBOD.

The CBOD announcement follows a recent directive from the Ministry of Energy to the GRA on a new standard for oil and gas metering for revenue assurance. This standard was developed jointly by the GSA with the Ministry of Trade and Industry and other stakeholders.

“The Chamber welcomes the ministry’s directive requiring all entities involved in revenue assurance measurement in the oil and gas sector to comply with the new standard. CBOD believes that a single, standardized GSA-certified measurement system is sufficient to provide accurate and reliable data.”

Furthermore, the CBOD commended the GRA’s commitment to providing revenue certainty to the government, adding that “any institution, private or public, authorised to undertake this on behalf of the government should do so in accordance with the standards set by both the GSA and the Ministry of Trade and Industry to ensure a transparent and efficient measurement system in the oil and gas sector.”

Furthermore, CBOD expressed support for the Ministry of Energy’s initiatives to establish further dialogue with relevant stakeholders, stressing the importance of establishing a transparent and efficient measurement system in the oil and gas sector.

Meanwhile, in response to CBOD’s calls to suspend the operations of Strategic Mobilization Limited (SML) in its crude oil depots, GRA said in a letter dated June 14 that the company “has been directed to resume its activities monitoring the Downstream Petroleum sector with effect from June 14, 2024, in accordance with the Presidential Guidelines on the KPMG report.”

“SML is expected to ensure that all systems are fully operational and compliant with relevant standards and regulations to provide accurate, reliable and timely monitoring services that will help us secure our revenues,” GRA stated. In this context, GRA has requested the cooperation of bulk oil distributors to ensure the successful resumption of monitoring activities.

Following this development, the Ministry of Energy announced that it is working with relevant authorities to develop new measurement standards in the oil and gas sector, using a Coriolis mass flow measurement system based on the Singapore standard. The Minister of Trade and Industry, pursuant to Section 13 of the Ghana Standards Authority Act, 2022, Act No. 1078, has declared these standards functional and mandatory.

“In light of the above, we would like to point out that all persons and entities performing measurements for the purpose of ensuring revenues in the oil and gas sector should do so in accordance with the new standards,” the ministry said in a statement.