Ghana government pays TOR’s debt to GCB

The Ghana government has paid the Ghana Commercial Bank (GCB) an amount of GH¢572 million owed by the Tema Oil Refinery to the bank, Board Chairman, Kojo Thompson have said according to the Reuters news service.

Mr Kojo Thompson was cited by Reuters as saying during the bank’s Annual General Meeting (AGM) in Accra March 28, 2011 that: “As I stand here I can confirm that the government has paid the remaining TOR indebtedness to GCB.”

In 2008, GCB stopped funding TOR’s operations to refine crude oil due to unpaid debts.

In March 2010 the GNA reported that the Government had paid GH¢445 million to settle part of Tema Oil Refinery (TOR’s) indebtedness to Ghana Commercial Bank (GCB).

The report cited the Minister of Finance and Economic Planning, Dr. Kwabena Duffuor saying the huge exposure of GCB to TOR had been a source of concern to government since it weakened the bank.

TOR is GCB’s major creditor and as at the end of December 2008, the overdraft position at GCB was approximately GH¢598 million, mainly in the form of established letters of credit, which crystallises into overdraft facilities.

According to the Minister, the debt had since grown to GH¢848 million because of the interest that had accrued on it and with the payment, the balance left was about GH¢403 million.

And the Daily Graphic newspaper reported in December 2010 that the government proposed an increase in existing levies on petroleum products to raise additional money for the payment of the Tema Oil Refinery (TOR) debt.

Under the amendment, the government proposed that the then levy of two pesewas on every litre of premium petroleum and gas oil should be increased to eight pesewas.

The 2.5 pesewas levy on a litre of marine gas oil was also to be increased to three pesewas, while the then 3.5 pesewas on each litre of Residuel Fuel Oil was to be increased to four pesewas.

By Ekow Quandzie