OMCs warn of fuel shortage as Oil prices skyrocket
Oil prices continuous to rise on the international market going up by $4 to hit $117 per barrel.
This comes as a good news for the government as it continuous to enjoy the huge windfall from the price of the commodity after budgeting around $62 per barrel in the 2022 budget.
However, consumers will bear the brunt of the rising commodity as they will be required to pay more for fuel at the pumps unless government intervenes.
Meanwhile, some oil marketing companies are warning of a shortage of fuel in some parts of the country, owing to the rising prices of crude oil.
The OMCs note that the new development has made it difficult to stay in business.
The OMCs have maintained that they are not breaking even with the current prices at the pumps and are therefore calling for some intervention from government.
Managing Director of BG petroleum company limited, Divine Fiakpui-Dzahini, noted that the only way to solve this challenge is by government intervening and resolving the forex exchange rate challenges.
‘’The situation is currently very bad, in the sense that we are unable to even cover the cost of the product. If you take for instance AGO per diesel, the current price is around GHC6 to GHC8, and if you should add the total taxes and levies to it, you are way above the current price. So how do you even recover the cost of the product before talking about the commission that goes to the dealer’’, he said.
When asked about the immediate solution to the situation, he said, ‘’the immediate solution, I believe, if government can probably intervene to resolve the forex exchange rate challenges. The second is, if government can cushion the cedi to ensure that it halts the further depreciation’’.
Alternatively, an Energy analyst, Kojo Poku, has advised fuel consumers to buy fuel from cheap fuel stations.
His assertion follows the recent hike in fuel prices. In less than two weeks, the prices of diesel and petrol have increased by over 30 per cent and are selling at ¢8.29 at the pumps.
Only a week after the fuel adjustment, petroleum industry experts predict that the commodity will reach GHC 9 by the end of March.
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Speaking in an interview on Wednesday, Mr Poku said fuel is a deregulated market, “so we should always try and look out for the cheapest fuel station to buy from.”
He added that, “the oil market will not correct itself because deregulation is not working well enough for the market to correct itself.“
He said although people are complaining of the adjustment in fuel prices, “there are some fuel stations that will sell a little bit below ¢8.29 so anytime you take the TOTAL price, there are some indigenous fuel stations or OMCs that would sell 30p to 40p cheaper than TOTAL.”
“Most people will say that government should reduce taxes and then the 30p, 40p that government will take out of the taxes, you are already having that at the pump so you have to look around and shop,” he said.
He also stated that the high fuel prices on the international market are a result of the Russia and Ukraine crises, but that is not a long-term measure and that prices are expected to normalise soon.
Meanwhile, the Minority in Parliament has served notice that it will haul the Finance Minister, Ken Ofori-Atta, before the House to present government’s response or plan to end the hikes in fuel prices.
According to the Minority, the Finance Ministry has the authority to remove some taxes that contribute to the final ex-pump fuel prices.
In the same development, Ranking Member of Parliament for Energy Committee, Edward Bawa, has blamed the government for not doing enough to cushion Ghanaians against the hardship caused by the rise in fuel prices.
“I will file an urgent question to the Minister of Finance. The reason is that if you look at the three factors that affect the ex-pump price, two of them are within the domain of the Minister of Finance. That is the issue of taxes and the issue of managing the cedi.”
“He will be in the position to be able to tell Ghanaians what the position of the government is with regards to the [fuel prices]. I think there are certain taxes that if you take them off, it will not affect the services for which they are supposed to finance,” he stated.
