Ghana: Oil Marketing Companies Lost GHc50m In Dec 2019-Agyemang Duah

The Chief Executive Officer of the Association of Oil Marketing Companies (AOMC’s) in the Republic of Ghana, Kwaku Agyemang-Duah says the OMCs lost a whopping GHS 51m between 16th and 31st December, 2019.

The losses, he explained was as a result of the OMCs staying the price of fuel at the pump when crude oil prices soared on the international market amidst the depreciation of the cedis.

He said the OMCs decided to keep the price at that time because increasing it would have become unbearable to consumers.

“In the second window of December 2019, which covered 16th to 31st, per the prevailing international market prices, petrol, diesel, and LPG were to be sold nominal at GHc5.57, GHc5.85, and GHc5.68 per litre/kg respectively. Yet, the highest ex-pump price of petrol and diesel was sold at GHc5.41 whereas LPG was sold at GHc5.58. This means, OMCs subsidised fuel prices and in effect, made losses of 16. 62 pesewas on petrol, 44.615 pesewas on diesel and 10.27 pesewas on LPG translating to GHc50 million.

“These losses were considered subsidies which OMCs were technically gifting our cherished consumers on a daily basis at retail outlets on the price.”

Mr Agyemang-Duah said these losses led to a good number of their members’ inability to pay their employees in a regular fashion, inability to settle financial obligations such as loan etc. when they fell due, delayed SSNIT contribution payments, inability of some OMCs to load petroleum products as well as honour some statutory fees and charges,” he said.

Mr Agyemang-Duah was addressing a press conference in response to recent calls by the opposition NDC and Chamber of Petroleum Consumers for OMCs to slash the prices of fuel at the pump, following the fall in crude oil price on the international market.

Readers would recall that the opposition NDC asked the government to ensure that fuel prices were reduced by at least 20 percent to reflect the decline of crude oil prices on the international market.

That, according to Mr Agyemang-Duah, is not possible because of the price build up indicators.

“A preview of the price build-up comprising ex-refinery price, taxes and levies and marketers and dealers margins indicate that for the expected public expectation of between 10 percent-20 percent reduction to occur. One of these parameters would have to suffer. However, our margins have suffered enough,” he stated.

At about 5pm, WTI was trading at about US$31.12 per barrel while Brent was hovering around US$33.48

“As the international prices decline at a steady state in the midst of the appreciation of the cedi, we believe that the competition engendered by the deregulation, will culminate in the eventual reduction of the ex-pump prices that fairly reflect the market dynamics as well as the need to ensure the survival of the operators.”

Source: www.energynewsafrica.com