Oil Marketing Companies (OMCs) are not happy following the government's directive to Ghana Oil Company (GOIL) to reduce fuel prices by 15pesewas.
Oil Marketing Companies (OMCs) are not happy following the government’s directive to Ghana Oil Company (GOIL) to reduce fuel prices by 15pesewas.
The OMCs said if government believes it cannot abide by the market rules of the deregulation regime, it should halt the process and revert to the old regime where government subsidises fuel prices as a form of intervention to cushion consumers.
The 175 OMCs argue that government cannot be a player and referee in a field that allows industries to operate business more freely, make decisions efficiently and remove corporate restrictions.
Their reaction follows President Akufo-Addo’s alleged directive to GOIL to reduce the price of fuel at the pumps effective Tuesday, December 7.
This was after government held a meeting with transport operators at the Presidency on Monday evening when the latter embarked on a sit-down strike in the morning over the rising cost of fuel prices in Ghana.
“If Government thinks that the foregoing (deregulation regime) cannot be adhered to, we must, as a matter of urgency, halt the Deregulation process and revert to the regulation regime,” The Chief Executive Officer of the Association of Oil Marketing Companies (AOMCs) Kwaku Agyemang-Duah said in a letter addressed to the Energy Minister.
The letter intercepted by ModernGhana News stated, “For the purpose of mutual understanding, Deregulation is the process of removing or reducing state regulations, typically in economic sphere or removal or reduction of laws or other demands of Government control. The goals are to allow industries to operate business more freely, make decision efficiently and remove corporate restrictions. The business of Government in deregulated exercise is to ensure the playing field is levelled for all players, which is duly exercised by National Petroleum Authority (NPA). For most of the past six (6) years, that Deregulation has been in vogue, OMCs/LPGMCs have been subsidizing the ex-pump prices with huge recoveries.
“Philippines affords us, as an example of a country which has deregulated its downstream industry with non- govemmental interference even when prices escalated to unimaginable levels a year after deregulation. It is worthy to note that, by this singular purported action of Government, it is not only distorting the market for the other One Hundred and Seventy-Five (175) private OMCs/LPGMCs, Government is thus acting as both a player and a referee.”
The AOMCs noted that the cumulative effects of government’s actions are threatening the survival of OMCs/LPGMCs.
It added that the directive to Goil, a major downstream player to reduce its ex-pump prices of fuel in a supposed level playing field is dangerous and unfortunate.
The AOMCs in the letter is asking government should immediately withdraw the directive to Goil and desists from ever interfering in the market in one way or the other if the deregulation regime is to succeed.
“Goil will consequently not be efficient and will end up as another ‘TOR spectacle’. We of the Association of Oil Marketing Companies (AOMC) on behalf of silent majority of One Hundred and Seventy-Five (175) OMCs /LPGMCs hereby request that: Government INithdraws the directive to Goil and desists from ever interfering in the market in one way or the other if the Deregulation regime is to succeed,” the AOMCs emphasised in the letter.
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