Premix Fuel Distribution: Why the 53% Premix Community Fund Should Be Safe

Introduction

In Ghana’s oil‑marketing sector, the premix fuel distribution system plays a pivotal role in supporting fishing communities along the coastline. Central to this system is a legally mandated 53% community fund that earmarks a substantial portion of premix margins for local development. Recent reports from the National Premix Fuel Secretariat highlight both the promise and the peril of this fund. When managed with transparency, accountability, and community involvement, the fund can finance sanitation projects, improve landing‑beach infrastructure, and boost livelihoods. Conversely, poor record‑keeping and politicisation threaten the credibility of the entire premix subsidy programme. This article explains the legal framework, examines current practices, and offers practical guidance to ensure the 53% premix community fund remains a catalyst for sustainable development.

Key Points

Background

Since the inception of Ghana’s premix fuel policy, the government has recognised that revenue generated from fuel sales at landing beaches must be reinvested locally. The legal instrument L.I. 2233 codifies this principle by reserving precisely 53 % of each premix margin for community development. The National Premix Fuel Secretariat, headed by Administrator Ebow Mensah, describes the fund as the “development heart” of the premix machine.

Under this arrangement, every time fuel is sold at a beach, a portion of the profit is automatically funneled into a communal bank account. The expectation is that the community, through elected committees, will decide how these resources are spent — whether on clean‑water projects, safety lighting, or infrastructure repairs. The underlying philosophy is simple: when profits are made at the landing beaches, part of that money must come back to develop the community. This is not a charitable gesture; it is a statutory obligation.

Despite the clear intent, implementation has faced challenges. In recent years, the Secretariat identified weak record‑keeping as a primary obstacle to effective oversight. Inaccurate stock records and incomplete documentation have hampered the ability of communities to verify how much fuel was received, sold, and how much profit was generated for the fund. To address these gaps, the Secretariat introduced the Premix Fuel Returns Booklet and a linked logbook system, both designed to create an auditable trail for every transaction.

Legal Framework

L.I. 2233 and the 53% Allocation

The Legal Instrument (L.I.) 2233 is the cornerstone of Ghana’s premix fuel policy. It mandates that:

1. 53 % of all premix fuel margins be deposited into a community fund specifically earmarked for fishing communities.
2. The fund must be held in a designated bank account, separate from any private or corporate accounts.
3. Projects financed by the fund must deliver benefits to the entire community, not to individuals or interest groups.
4. Communities must be consulted in the selection, implementation, and monitoring of funded projects.

Failure to comply with any of these provisions can result in sanctions, including the suspension of premix subsidies and potential legal action against responsible officials.

Role of the National Premix Fuel Secretariat

The National Premix Fuel Secretariat operates as the supervisory body tasked with ensuring that the 53 % allocation is respected. Its responsibilities include:

• Monitoring the flow of funds from landing beaches to community accounts.
• Providing technical assistance to beach committees on record‑keeping and reporting.
• Conducting audits and publishing quarterly public reports on fund balances.
• Offering capacity‑building tools such as the Premix Fuel Returns Booklet and logbook templates.

By acting as both regulator and facilitator, the Secretariat aims to protect the fund while empowering communities to manage their own development resources.

Analysis

An in‑depth look at the current state of premix fund management reveals a delicate balance between potential and vulnerability.

Legal Framework: L.I. 2233 and the 53% Allocation

While L.I. 2233 provides a robust legal foundation, its effectiveness hinges on enforcement. The law is clear, but without consistent monitoring, compliance can slip. The Secretariat’s recent emphasis on quarterly public reporting at touchdown beaches is a positive step, yet the frequency of audits remains variable across regions. In some districts, committees have demonstrated exemplary transparency, publishing detailed bank statements and project progress reports. In others, the lack of standardized reporting tools has led to gaps that could be exploited.

Role of the National Premix Fuel Secretariat

The Secretariat’s dual role as regulator and capacity‑builder creates a unique opportunity to embed accountability into everyday operations. By mandating the use of the Premix Fuel Returns Booklet, the Secretariat ensures that every transaction — receipt, sale, profit calculation, and fund allocation — is recorded in a uniform manner. This standardisation reduces ambiguity and makes it easier for community members to verify figures independently.

Transparency and Community Involvement

One of the most compelling arguments for safeguarding the fund is the direct link between transparency and community trust. When committees openly share bank statements and project outcomes, residents can see the tangible benefits of the fund. This visibility not only reinforces confidence but also encourages broader participation in decision‑making processes. Moreover, community‑led project selection helps prevent politicisation, ensuring that resources are allocated based on genuine need rather than partisan interests.

Risks of Mismanagement

If the fund is perceived as private or poorly managed, the consequences can be severe:

• Erosion of Public Trust: Citizens may begin to view premix margins as personal profit, undermining support for the subsidy.
• Increased Corruption Vulnerability: Weak oversight creates openings for diversion of funds.
• Policy Backlash: Persistent mismanagement could trigger legislative reforms that restrict or eliminate the subsidy altogether.

These risks underscore the importance of treating the 53 % community fund as a public trust rather than a discretionary budget line.

Practical Advice

For fishing communities, local leaders, and policy implementers, the following actionable steps can help protect and maximise the impact of the premix community fund.

Best Practices for Community Fund Management

1. Adopt the Premix Fuel Returns Booklet: Use the official template to record every transaction from fuel receipt to profit calculation. Ensure that the profit figure and the 53 % allocation are clearly highlighted.

2. Maintain Separate Bank Accounts: Keep the community fund in a dedicated account that is distinct from personal or operational accounts. This separation simplifies audits and reduces the risk of commingling funds.

3. Publish Quarterly Reports: Release transparent reports that include opening balances, inflows, outflows, and project milestones. Distribute these reports at community meetings and post them on local notice boards.

4. Engage Stakeholders Early: Involve fisherfolk, women’s groups, and youth organisations in the selection of projects. Early consultation builds ownership and reduces the likelihood of later disputes.

5. Document Decision‑Making: Keep minutes of meetings where project proposals are discussed and approved. Signed minutes provide a clear audit trail and demonstrate accountability.

Implementing the Premix Fuel Returns Booklet

The Premix Fuel Returns Booklet is more than a ledger; it is a governance tool. To use it effectively:

1. Record the exact date and quantity of fuel received.
2. Document the sale price and volume sold, noting any market‑day variations.
3. Calculate the gross margin and apply the 53 % allocation formula.
4. Enter the resulting contribution into the designated community account.
5. Have the responsible committee member sign off on each entry.

By following this step‑by‑step process, communities can create a verifiable record that withstands external scrutiny and supports informed decision‑making.

Frequently Asked Questions (FAQ)

What is the 53% community fund in the premix fuel distribution system?

It is the portion of premix fuel margins that the law (L.I. 2233) requires to be set aside for the development of fishing communities. Specifically, 53 % of each margin must be deposited into a communal bank account for projects that benefit the entire community.

Who is responsible for overseeing the fund?

The National Premix Fuel Secretariat, together with local touchdown beach committees, shares oversight responsibility. The Secretariat provides regulatory guidance, while committees manage day‑to‑day transactions and project selection.

How can communities verify that the fund is being used correctly?

Communities can request and review quarterly public reports, examine the Premix Fuel Returns Booklet entries, and compare bank statements with recorded transactions. Sign‑off signatures on each entry also provide evidence of accountability.

What happens if the fund is misused?

Misuse can trigger legal consequences under L.I. 2233, including fines or suspension of the premix subsidy. Additionally, mismanagement can damage public trust and jeopardise future funding allocations.

Why is transparency important for the premix subsidy?

Transparency builds confidence that the subsidy is being used for its intended purpose — community development. When people see tangible benefits, they are more likely to support the continued operation of the subsidy, which is vital for the national fuel supply chain.

Conclusion

The 53% premix community fund represents a powerful mechanism for turning fuel‑sales revenue into concrete improvements for Ghana’s coastal fishing communities. Its success depends on strict adherence to the legal framework set out in L.I. 2233, robust record‑keeping, and active community participation. By embracing the tools and practices promoted by the National Premix Fuel Secretariat — such as the Premix Fuel Returns Booklet, quarterly public reporting, and transparent bank statements — stakeholders can safeguard the fund from abuse, maintain public trust, and ensure that the premix subsidy remains a sustainable source of development.

Protecting this fund is not merely a regulatory obligation; it is an investment in the long‑term resilience of the premix system itself. When accountability is prioritised, the fund delivers visible projects, strengthens community cohesion, and reinforces the credibility of the entire premix distribution network. For policymakers, administrators, and community leaders alike, the message is clear: safeguard the 53% fund, and the premix subsidy will thrive.