CBOD eyes 50% stake in Mali’s petroleum market

Although the country currently accounts for only 1 percent of petroleum products to the Malian market, the Chamber of Bulk Oil Distributors (CBOD) believes this figure can be moved up to about 50 percent within the shortest possible time.

As a landlocked country without petroleum resources, Mali depends on some of its sub-regional neighbours like Ghana that is bounded by sea for petroleum products. And the Chamber after a recent meeting in Accra with a Malian delegation, comprising the country’s petroleum sector regulator and industry players, said it is keen on exploring opportunities that will see it take a major foothold in the landlocked country’s petroleum market.

“Mali’s market demand is 1.7 million metric tonnes, a little over 40 percent of what we do here; so if we are able to take 50 percent of that market we will be actually increasing our general throughput by some 20 -25 percent at a minimum – and that will be a major game changer for us,” said CBOD’s CEO, Senyo Hosi.

The availability of excess storage capacity, coupled with the country’s high quality standards in petroleum products, Mr. Hosi explains, gives Ghana an upper hand to become a preferred route for landlocked countries to lift petroleum products from.

“Our storage facilities are highly underutilised. In a month we are effectively using only 20 percent of the capacity. So, we actually need these markets to thrive; hence our conversations have also been centred on understanding where the bottlenecks are, looking at where the points of uncompetitiveness are, and developing solutions to address them.

“We also spoke about how to optimise the service quality and our competitiveness to be a dominant contributor to their market.”

The country is currently contributing just one percent of the Malian consumption, and Mr. Hosi believes it is because the country is losing ground significantly to the likes of Senegal, Cote d’Ivoire and Benin in the race to become the preferred route for landlocked countries to lift petroleum products from.

“Our ability to grow and be independent depends on our ability to penetrate the Sahelian or landlocked markets. We need to influence the volumes that are traded in the landlocked countries. So, the question we need to ask ourselves is how do you make Ghana a preferred route for supply to the landlocked markets?” he quizzed.

“The solutions were not fully found, but now we understand what our customer – which is the Malian market – needs and will be working with government to develop the right solutions to address the challenges,” he noted.

The Malian delegation was in the country last week to have deliberations with the National Petroleum Authority (NPA), Bulk Oil Storage & Transportation Company (BOST) and other stakeholders.

For his part, Issa Kondo, Deputy Director-General of ONAP – regulator of the Malian petroleum industry, who led the delegation said his country is open and ready to do business with Ghana beyond the lifting of petroleum products. He said several investment opportunities exist in petroleum storage infrastructure, among others.

As a landlocked nation, he said, Mali imports most of its petroleum products from other countries; and that the visit to Ghana became necessary because there has been a significant drop in volumes from Ghana to Mali, saying: “We thought it proper to approach our Ghanaian counterparts to find out what the challenges are on the ground and together find solutions for them”.

Among some of the challenges which prevent players from Mali importing petroleum products from Ghana include issuance of bank guarantees, lack of a common currency, as well arbitrary charges.

Explaining further, Mr. Kondo said: “It is the bank guarantees which are the main issue, and I think the NPA and government of Ghana are right to have that in place because products that are destined for export are taxed; so you will always have people who want to take advantage of that situation.”

He however added that: “We have agreed with the NPA to collaborate closely in order to guarantee for some of the Malian importers – so that anytime they are coming to Ghana to do a transaction, we will inform the NPA accordingly; and once the products arrive in Mali we will come to NPA and acknowledge receipt of all the trucks that loaded from Ghana to Mali”.