Calls by Alex Mould, the former Chief Executive Officer of Ghana National Petroleum Company (GNPC) and Duncan Amoah of COPEC a reduction in the price of oil at the pump due to a fall in oil price on the international market and the appreciation of the cedi has been shot down by the Chief Executive Officer [CEO] of Association of Oil Marketing Companies (AOMC) Kweku Agyemang Duah.
He said there is no need to reduce oil prices because in January 2020, price of oil on the world market was high, as a result oil marketing companies had to borrow money from the banks to fund their operations, hence they must maintain the current price in order to recoup their investment.
He further explained that the spell at which price of oil is low on the international market is too short to warrant a reduction in oil prices in Ghana.
He was of a firm conviction that when oil marketing companies reduce oil prices now taking in to consideration the current cost structure the oil marketing companies would run at a lost and the banks that lend money to them to finance their oil operations would pursue them for their cash.
Mr. Kweku Agyemang Duah told GhanaNewsOnline.com.gh in an interview in Accra that fuel pricing by the law supporting the deregulation excise is the prerogative of oil marketing companies and that of bulk distribution companies who price ex-refinery, stressing that, just like every commodity the buyer decide the way to price the commodity in order to recover its cost.
In the oil industry, he opined that, oil marketing companies have full cost recovery system and every pesawa they spend needed to be recovered. Few months ago, the Chief Executive Officer of AOMC said, oil marketing companies were sweating under high diesel price noting that the price consumers paid for the product was not the actual price because the oil marketing companies had to subsidize the commodity.
As a result of the diesel subsidy, Mr. Kweku Agyemang Duah, said the oil marketing companies had not recovered fully that is why when the commodity is going down there would not be a proportionate reduction of oil price because it would afford them the opportunity to recover their cost.
He also said issues regarding workers salary, electricity price and the loan the oil marketing companies took from the banks had not been reviewed downwards the reason why oil price will not be reduce. Mr. Amoah is however advocating strongly for a 5% reduction in oil price in the March, 2020 pricing window.
Source: Adovor Nutifafa
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