REMARKS MADE BY THE MINISTER OF ENERGY, DR. PAA KWESI NDUOM ON 12TH MARCH, 2004 AT THE CEREMONY TO MARK THE IMPLEMENTATION OF THE FIRST PART OF THE ACCELERATED PETROLEUM DEREGULATION PROGRAMME

I am pleased to welcome you to today's simple and yet quite important ceremony to mark the end of about five months of planning and the beginning of the implementation of the accelerated deregulation of the petroleum sub-sector. The purpose of today's ceremony is to confirm the Ministry of Energy's approval of:

1. Memorandum of Understanding between the Oil Marketting Companies (OMCs) and the Tema Oil Refinery (TOR);
2. Service Level Agreement between the OMCs and TOR;
3. Petroleum Products Storage and Throughput Agreement between the OMCs and TOR;
4. Bid documents for tendering for petroleum products; and
5. Inspection Service Agreement

In reality, the accelerated deregulation began on January 1, 2004. since then, the Tema Oil Refinery has not conducted any tenders for the procurement and importation of refined petroleum products. The OMCs have begun to take financial responsibility for imported petroleum products. From today, the private sector in Ghana will conduct and take financial responsibility for the importation of petroleum products.

I wish to reiterate the government's firm commitment to the deregulation of the petroleum sector. You will recall that prior to 2001, TOR accumulated significant financial debt that has become a significant burden for government and the taxpayer. This situation, the present government is determined not to repeat and is firmly resolved to ensure that it does not reoccur. Deregulation will be implemented in phases. The phase that we are in involves the importation of refined petroleum products by the private sector with the Oil Marketing companies in the forefront to supplement TOR's production capacity. In this regard, a tender committee has been formed to begin the open and transparent tendering of products from Monday 15th March this year. The Tender Committee is made up of members from the private sector and is chaired by the National Petroleum Tender Board.

The second phase will involve the importation of crude oil by the private sector for TOR to process. This is also scheduled to begin this year. The National Petroleum Tender Board has been assigned the responsibility to plan and execute this phase.

All of this requires a lot of work and plenty of caution. Our principal aim as government is to protect the interest of the Ghanaian consumer. It is also our burning desire to continue with the gains made in the broader economy and not to jeopardize the opportunity now present for lowering the cost of doing business in the country. This is why as part of the economic policy presented to Parliament, the Minister of Finance & Economic Planning announced government's plans to control and manage key aspects of the petroleum sector to ensure stability and reliability of product supply and pricing.

Deregulation comes with costs and benefits. As such, we must necessarily tread cautiously. This year is a learning year. It will serve as a transition year. We plan to review our progress during the first quarter of next year and determine how to open up the process some more, particularly as we determine how to deal with fluctuating prices of crude oil and refined products on the world market.

I am now happy to declare formally, that the documents presented here this morning by the National Petroleum Planning Committee has been approved by the Ministry of Energy as the basis for proceeding with the planning, procurement, storage, quality control and supply of imported petroleum product by the private sector in Ghana.

I wish all of us government, private sector and consumers success with this important task of petroleum sector deregulation.

Thank you.