Mining companies in Sierra Leone have been ordered by the government to import their own fuel. Finance Minister Dennis Vandy made the announcement and said the policy directive is part of the government’s approach to mitigating the ongoing crisis in the country’s petroleum downstream sector, which has largely been attributed to the Russia-Ukraine conflict.
The new policy is part of “strategic decisions” being taken following discussions with stakeholders in the sector, including petroleum importers, necessitated by the need to reduce pressure on the Central Bank of Sierra Leone from providing foreign currency to the oil marketing companies.
According to the finance ministry, out of a total of 61,545,694 liters of diesel fuel uplifted by the OMCs between January and March, mining companies and other end-users uplifted 32,539,167, accounting for around 53%. The central bank provided an estimated 24 million U.S. dollars in foreign exchange support in the first quarter of this year for the importation of petroleum products.
“This implies that while the government provides concessions to these agencies, they also enjoy non-pass-through costs as they are also heavily subsidized by the meager resources of foreign support by the Bank of Sierra Leone with the aim of cushioning the retail market. The situation could get serious with evidence that mining companies were stockpiling diesel fuel with limited supply to ordinary consumers,” Vandy said.