STRANEK Africa drags BOST, NPA, and others to court over dirty fuel

A Non-Governmental Organization, Strategic Thinkers Network Africa, has sued all parties involved in the contaminated fuel saga.

A writ of summons sighted by Primenewsghana mentioned National Petroleum Authority, Bulk Oil Storage and Transportation (BOST) Ltd,  BOST Managing Director Alfred Obeng Boateng, Movenpina Energy, Zupoil, and Macwest as defendants.

The Bulk Oil Storage and Transportation Company Limited (BOST) has come under public criticisms for selling 5 million litres of contaminated fuel, technically known as off-spec, to two unlicensed companies, Movenpina and Zup Oil, which were established few days before BOST released the product. The contamination is said to have resulted from the mixing of petrol and diesel by mistake.

The Africa Centre for Energy Policy, ACEP, first raised alarm on the sale of the product in a deal it (ACEP) described as leading to the loss of millions of cedis in revenue to the state, because the off-spec was sold at at a price well below market value. The think tank maintained the product sold at GHC1.0 per litre to the companies, could have fetched nearly GHC 2 per litre on the market. ACEP also questioned the processes leading to the approval of Movenpina as the buyer when the company had no license to operate in the market, a position confirmed by the National Petroleum Authority.

The Chamber of Petroleum Consumers, Ghana, (COPEC) and the Chamber of Bulk Oil Distributors supported the position of ACEP and also claimed some of the contaminated fuel had found its way onto the market to be sold to motorists as petrol. 

COPEC-GH in a strongly worded statement said the Managing Director of BOST, Alfred Boateng acted in his own selfish interest in the sale of the contaminated fuel and asked for his interdiction as investigations into the issue begun.

Preliminary investigations by the National Petroleum Authority (NPA) established none of the oil had found its way onto the market. This followed a check at the premises of Zup oil which revealed all the oil lifted from BOST were still contained in their (Zup oil) storage facilities.

Following the NPA investigations, The Energy Minister, Boakye Agyarko constituted an 8 member investigative committee to look into the matter. The committee comprised representatives of the Bureau of National Investigations, Civil Society, BOST, Chamber of Petroleum Consumers, Ghana, (COPEC),  the Chamber of Bulk Oil Distributors and other stakeholders.

The terms of reference included; To determine the circumstances that created the off-spec product.
• Reveal procedures undertaking by BOST to evacuate the contaminated product.
• Ascertain the quality and the remaining quantity of product and determine if the product can be corrected, if not the alternative use of the product and the review of the transaction between the companies.

However in a surprise move, even before the committee will begun it work, the Energy Minister cleared BOST and its Managing Director, Alfred Obeng Boateng of wrongdoing citing a Bureau of National Investigation (BNI) and National Security report.

“The investigations so far carried out by the state security agencies and the NPA show that on the basis of previous practice, there was no wrongdoing at BOST on the sale of the 5 million liters of contaminated products,” he stated.

This has not gone down well with some parties involved including COPEC-GH which expressed the view that the position taken by the Mr Agyarko prejudices the work of the committee. The Chamber called for the scrapping of the committee and the establishment of an independent presidential commission of enquiry into the matter.

The Strategic Thinkers Network Africa says it does not believe the parties involved would be able to get to the bottom of issue due to the circumstances surrounding the entire deal and the happenings thereafter. 

In the writ, STRANEK (Plaintiff) asserted that without probing the background of Movenpinaa Energy and its standing with the NPA, Mr. Boateng approved the sale of five million litres to Movenpinaa at a unit price of GHS1 per litre on credit without public tender or auction for disposing of public property.

Also, Mr Boateng, acting on behalf of BOST, had no legal authority to approve and should not have approved the sale of the adulterated products to Movenpinaa since the firm was not licensed to engage in the downstream petroleum industry by the NPA.

The Plaintiff added that the Movenpinaa subsequently sold to Macwest, two million litres at GHS1.32 per litre for GHS2,640,000, making a profit of GHS640,000 having purchased the product at GHS1 per litre in a scheme to cause huge financial loss to the state.

Therefore on the backdrop of STRANEK's claims stated above, counsel for the Plaintiff Godwin Kudzo Tameklo contended that the entire transaction was “illegal,” “fraudulent” and with the potential to cause financial loss to the State, and is therefore null and void and of no effect.”
Strategic Thinkers Network-Africa is, therefore, seeking the following reliefs:

1. A declaration that the transaction for the disposal of the contaminated fuel from the 1st Defendant acting through the 2nd Defendant to the 3rd and 4th Defendants is illegal, unlawful and in clear violation of Section 16(2)(c) of the Page | 6 Public Procurement Act, 2003(Act 663) as amended by the Public Procurement (Amendment) Act, 2016 (Act 914).

2. A declaration that the decision to single source the sale of the contaminated fuel products to the 4th Defendant by the 2nd Defendant acting through the 3rd Defendant is in clear contravention of Section 35 and 40(1) of Public Procurement Act, 2003, (Act 663) as amended by the Public Procurement (Amendment) Act, 2016 (Act 914).

3. A declaration that the activities of the 4th and 5th Defendants in engaging in downstream petroleum activities without licenses is in violation of Section 11 of the National Petroleum Authority Act, 2005 (Act 691).

4. An order of the Honourable Court setting aside the entire transaction on grounds of illegality and fraud.

5. Costs, including the cost of legal representation.

6. Any other reliefs that this Honourable Court may deem fit.