Adjustment of petroleum prices saved OMCs

Accra, Jan. 15, GNA - The Association of Oil Marketing Companies (AOMCs) at the weekend revealed that the recent upward adjustment of prices of petroleum products had saved the Oil Marketing Companies (OMCs) from financial dehydration.

In an interview with the Ghana News Agency in Accra, Mr Kwaku Agyemang-Duah, Industry Co-ordinator of AOMCs, explained that the price adjustment had led to an increase in the distribution margin from 10 per cent to 26 per cent.

"The 15 per cent distribution margin on a litre of petroleum product= s was woefully inadequate; OMCs were rarely breaking even on production cost which includes overhead cost and decent returns on investment.

"The increase in the margins for the dealers and marketers is expect= ed to meet their rising cost operations and improve service delivery and efficiency," Mr Agyemang-Duah said. "This was also partially responsibly for some OMCs finding it diffic= ult to meet their loan repayment obligation and regularly lifting crude to serv= e the public," he said. The National Petroleum Authority (NPA) adjusted petroleum prices with effect from Tuesday January 4, citing the rise in crude oil on the world market. Gas oil and gasoline were increased by 30 per cent in the ex-pump pric= e while Liquified Petroleum Gas rose by 25 per cent.

The NPA listed the new prices as follows: Petrol, GHp152.07 from GH116.98 per litre; Diesel, GHp153.46 from GHp118.05 per litre and LPG, GHp104.76 from GHp83.81 per kilogramme. The prices of Kerosene and Premix fuel however remained the same.

Mr Agyemang-Duah commended the State for taking pro-active steps and the bold decision to increase the distribution margin. On recent pressure by a section of the public for reduction in the prices of petroleum products, Mr Agyeman-Duah described it as unjustifiable= .. "If we reverse the prices, it means government will either pay more subsidies; divert money for infrastructural development to service petroleu= m debt=85. 94 he said.

He said wholesale government subsidy is unattainable adding that "government must develop other means of subsidy, targeted subsidy for workers and users of particular types of vehicles and streamline fuel usage to ensure that owners of luxurious vehicles pay for it". Mr Agyeman-Duah said the public needed to understand the need to pay realistic prices for petroleum products and get better and uninterrupted services.