BDCs to OMCS: Drastically reduce prices of fuel to reflect change

The Ghana Chamber Bulk Oil Distributors (BDCs) has appealed to Oil Marketing Companies (OMCs) to further reduce prices of petroleum products to reflect reliefs they are getting from them.

There has been a 25 % reduction in oil prices but some OMCs have only sanctioned close to 15% reduction in price of petrol. 

Some stakeholders have criticised the new prices, arguing that it should have been reduced by more than the 15 %.

The Chief Executive Officer of the Chamber, Mr. Senyo Horsi on the Citi Breakfast Show said while some OMCs secured their products at good prices from BDCs but some have refused to pass it on.

“Often we have seen OMCs secure good prices with the BDCs but it has not reflected on the consumers,” he complained.

Mr. Horsi revealed that the bigger OMCs are expected to significantly reduce their products since they are able to negotiate with the BDCs better, but they rather charge higher prices.

He further these OMCs after fairly negotiating with the BDCs for good prices, determine whether to pass that price on to the consumer or not.

“There are two ways where you have prices go down so if an OMC negotiates with a BDC, and he gets a good price he may choose to pass that whole saving out. The other thing is for him to look at his own margin.”

He cited a vivid example where some BDCs reduced prices by 10 percent but that reduction did not reflect at the pumps.

Senyo Horsi however stated the challenge can be resolved if consumers are informed about the new prices and are compelled to demand more from the OMCs. 

“We are saying put in a lot of information out there to push consumers to demand more.In aprice liberialised regime, the real regulator is you the consumer because when there is more information about price trends and how things are moving, you can also demand more from your service provider who is an OMC or a BDC.”

Role of NPA

Asked whether the National Petroleum Authority (NPA)  has the power to set ceilings for pricing of petroleum products, Senyo Horsi  responded saying: “  I don’t think the NPA can set ceilings. The setting of ceilings is what use to happen before this price liberalisation.”

According to him, “If the NPA sets a ceiling and that becomes economically challenged such that there are losses associated with that, then the NPA has to pay so the NPA has no place or space in trying to now set a ceiling.”

“They can actually advertise what the market is doing, that’s true but you cannot expect NPA to determine the prices. Then the whole purpose is defeated,” he added.

Senyo believes what actually regulates this entire exercise is information available to the consumer . “At the chamber level as a public interest service, we are now making information available but it will take time,” he said.