Oil Marketing Companies (OMCs) in the Republic of Ghana, West Africa, have stated categorically that nobody can compel them to reduce the prices of fuel products as a result of the fall in crude oil price on the international market as well as the stability of the Ghanaian cedi.
Addressing a press conference in Accra, Mr Kwaku Agyemang-Duah, who is the Chief Executive Officer of the Association of Oil Marketing Companies, said though the OMCs have witnessed marginal reduction in the price of the commodity, taxes on the product, compounded by huge interests on loans, as well as high production cost over the past one year would not allow them to immediately reduce prices at the pump.
“The issue of some people sitting somewhere instructing OMCs to reduce their prices don’t work. It doesn’t work anywhere. You need to leave the OMCs to do what they want to do. Of cause you are at liberty to form your own opinions to just say anything but the bottom line is, the OMCs have to see whether it is running safe or not,” he explained.
The parameters for defining pricing, he explained, factoring in production costs and other auxiliaries must be right to determine price mechanisms in any business.
“So you ought to be right as you don’t talk about just little price fluctuations to either decrease or increase prices of commodities,” he added.
Agyeman-Duah was of the view that there was a time that prices at the world market sky-rocketed but the BDCs did not assist them to stay in business.
He said they had to go for loans with high interests to stay in business.
“In this industry, liquidity is the key issue. If you have to go for cash and you don’t have it, you have to go to the bank. The bank will also add their interest. So, financing cost is also involved in the dynamics. That is why we have this kind of situation. It is not a straight jacket like that, but what I am saying is that we won’t do anything to kill anybody in the industry because we live on the people,” he assured their customers.
He contended that should they keep the price so high for a long time and people refuse to buy, if the world market price continues to fall, it could negatively affect their business.
He added that the OMCs would respond appropriately when the time is due.
He further stated that Ghana’s law on company insolvency fails to protect struggling businesses and it makes it difficult to take decisions without critically examining all the parameters in corporate governance culture.
“There is one thing in this country…our insolvency laws are not too good. Companies collapse. If insolvency laws are working, it will protect you in trouble but not in this case.
“If you are collapsing, you are responsible for everything,” he bemoaned.