A follow-up exercise by the Chamber of Petroleum Consumers (COPEC) of fuel stations has revealed some stations are still shortchanging customers.
The stations include Frimps Oil on the Kasoa road, Goodness Service Station, and the Shell service station at Amanfrom.
Speaking at a press conference in Accra on Monday, the Executive Director of COPEC, Duncan Amoah urged the owners or operators of such filling stations to immediately close down.
His call comes after Ghana Standards Authority (GSA), few weeks ago published a list of 10 fuel stations under-delivering to customers.
The filling stations which were found to be under-delivering the right quantities of fuel to customers were Shell station at the Motorway Extension; Total at McCarthyHill in Accra; GOIL at Mile 11; Frimps Oil at Tetegu junction; GOIL at Galilea; and Frimps Oil on Spintex Road.
Meanwhile, COPEC has expressed its readiness to push for appropriate and adequate compensation for all customers who were cheated by these filling stations.
According to COPEC, the modalities of this compensations will be jointly determined by the affected stations and the key stakeholders bearing in mind the option to seek legal redress at the law courts.
Below is the full statement:
CHAMBER OF PETROLEUM CONSUMERS
PRESS CONFERENCE ON GHANA STANDARD AUTHORITY’S REPORT ON
CHEATING FUEL RETAILERS AND MATTERS ARISING HELD ON 24TH JUNE 2016
This Press conference is to report back to the public and our key stakeholders on current happenings as far as the issue of some oil marketing companies adjusting their pumps to cheat the unsuspecting public, what has been done, what will be done going forward, and what the general public should begin observing going forward,
This press conference will also attempt to highlight some of our key industry findings that need urgent addressing and attention, an overall assessment aimed at addressing some of the key disturbing factors that also puts unnecessary pressures on the petroleum service providers ( particularly the retailers and dealers ).
Issues that lead to fuel loses in the downstream fuel industry and also to offer some recommendations on ensuring the unfortunate incidents of fuel stations shortchanging consumers and the public does not ever recur.
● The disturbing yet unsurprising revelation of some cheating fuel outlets is one phenomenon that should not ever repeat itself especially in the face of high fuel prices across pumps within the country.
● The Greater Accra inspections audit by the Ghana Standards Authority ( GSA ) clearly did not capture every single one of the over 600 fuel station outlets within the region but did approximately 11% of all fuel stations.
● Of this small percentage was an even smaller number of 10 stations representing about 17% that failed to meet the quantity assessment test or checks by the GSA.
● Our follow up checks two clear months after the GSA inspections revealed some interesting outcomes and we would like to share with u what was observed with respect to the various stations or outlets that were indicted.
● 1. Allied service station-Sakaman.
Our unannounced visit to this station revealed there was indeed a short supply of fuel to the unsuspecting consuming as a simple test from 4 out of the 5 function pumps revealed lower volumes were indeed being served the public.
An immediate follow up report was lodged with the GSA for it to follow up on our findings, a follow up visit the next day revealed the company had taken steps to rectify the problem as the pumps were back to working normally and dispensing at the right volumes as expected.
Copec Ghana can also report back of the outright dismissal of the Manager at the said station.
2. TOTAL service station – McCarthy hills.
Two unannounced visits to this station leaves us believing there has been a departure from under dispensing volumes as was earlier captured in the GSA audit or inspection. All four pumps randomly sampled produced accurate and right volumes.
3. Goodness service station – Amanfrom.
Our roving team together with the media visited the said station following the publication of the GSA inspections but sadly nothing seems to have changed with this particular station, the mandatory 10 litre can which should be available upon demand by the customer was not available and thus difficult to ascertain if any corrective measure had been put in place to protect the consumer,
We recommend the owners or operators of this particular station to immediately close down this outlet and ensure the right things are done to forestall any further shortchanging of the unsuspecting public as duly captured by the GSA
4. Goil service station at Mile 11
The team visited the said station on two different occasions and are convinced there is q clear departure from the earlier reported incident of under dispensing as was captured by the GSA inspections.
A random sampling of all four functional fuel pump machines and nozzles at the station on both occasions indicated there had been corrections effected as all the pumps were found to be dispensing to the tolerable volumes with one pump actually over-dispensing.
5. Goil service station – Amanfrom
A visit to this station also indicated there had been a rectification of the said problem as all four functional pumps and nozzles sampled served the right volumes on both occasions.
6. Shell Service Station – Motorway Extension.
Unannounced Visits on two occasions to this device station also indicated there has been a rectification of the under dispensing phenomenon as four of the randomly sampled pumps and nozzles were all dispensing the right volumes at the times of the visits.
7. Shell service Station – Amanfrom
Perhaps the most disappointing of all the visits following from the GSA inspections and indictment. This said station for the record looks nothing like the regular shell stations or outlets and must immediately be closed down as general sanitary conditions in and around the station were pretty poor and shambolic, no 10 litre can on demand, fire extinguisher clearly empty and lying in a bucket of refuse at the forecourt.
management of the said station be immediately hauled before the appropriate law enforcement authorities as the operations of the said outlet could easily be said to be dangerous and without any proper safety standards in place in the event of any fire or accident.
Managers of the shell brand to immediately dissociate from the said station as it only posses a disgrace to the brand. The general consuming public to also boycott this station till effective maintenance and repair works be done.
8. Frimps Oil service station – Amanfrom
Generally well kept but clearly under dispensing as all four pumps we randomly sampled from gave lower volumes with the 10 litre can but this lower volume is compensated by the said outlet also being the lowest price service station such that if one added the savings made from buying from the said station the new volumes now exceed those of the other stations on the market.
Management of the said Oil station to ensure they increase their forecourt quoted prices to the average on the market if that will make them to serve the right quantities as expected as any subsequent random visits will compel an advice to the general public to boycott the said station.
9. Glory Oil Service Station – Spintex Road.
Two visits to this station indicated there has been a correction if not a complete turn around of the earlier reported under dispensing as all four pumps sampled gave regular volumes.
10. Frimps Oil service station – Spintex Road
A visit to this outlet also indicated regular volumes being dispensed and thus a general confidence that the problem or anomaly has been rectified even tho the price here differed from the price at the other service station earlier mentioned.
GENERAL ACTIONS AND COMPENSATION SUBSEQUENT.
COPEC GHANA going forward intends to push for appropriate and adequate compensation for all customers of the above-mentioned stations, the modalities of this compensations will be jointly determined by the affected stations and the key stakeholders bearing in mind the option to seek legal redress at the law courts.
Copec Ghana further advises the public to volunteer any useful information on any negative or bad practices from any service station across the country in order to curtail this negative trade that has bedevilled some operators in the petroleum downstream subsector.
We further assure the general of a continuous unannounced spot visits to all the various stations across the length and breadth of this country and will not hesitate at all in drawing the attention of regulators and the public to any such station that will be subsequently found to be selling fuel without the mandatory dispute resolution device or the 10 litre can boldly displayed at the forecourt.
These and several other activities including a dedicated hotline for the general public to provide tip offs and reports on stations they suspect or believe to be shortchanging them going forward.
There will also be a monthly public reward of the Oil Marketing Company making the most strides at keeping it’s customers and consumers satisfied with both it’s service and the integrity of the service.
These and other measures will be keenly pursued whiles collaborating with the Association of Oil Marketing Companies ( AOMC ), Petroleum Retailers Association, Industry Regulators and other civil society actors within the downstream petroleum sub-sector to ensure a restoration of confidence in the activities of the petroleum service providers to all and sundry.
● The above notwithstanding, COPEC Ghana, has also taken upon itself the responsibility to consistently promote and advocate for reforms in the downstream of the Petroleum Industry in pursuance of the safety and welfare of consumers of petroleum products and that of the Oil Marketing Companies (OMCs).
Since the Ghana Standards Authority’s report issued on 9th June 2019, on some ten (10) fuel Retail Outlets who were engaged in the business of short-delivering to their consumers, COPEC Ghana has been following developments and has placed positioned itself to serve as a catalyst in offering some vitally needed recommendations to the Regulators in the industry and other stakeholders on other ways of ensuring we collectively put to an end to this disturbing phenomenon of some retailers and dealers cheating by way of adjusting of pumps to under deliver..
● The importance of the sustainability of the operations, and profitability of the various petroleum service providers particularly the Oil Marketing Companies cannot be over emphasised
● It cannot be underestimated the important role played by the vastly compliant OMCs who are relevant stakeholders in the petroleum industry, activities of whom are largely and expressly regulated by the Government through relevant state Agencies like the NPA and GSA whose interest we should also look out for. COPEC Ghana on the other hand is not just to protect the interest of the OMCs to the detriment of the final consumer.
● COPEC is in no way disputing the findings as was presented by the Standards Authority but took the responsibility to investigate the issues further to gain a better understanding of some of the factors that might have lead some OMC dealers to engage in these fraudulent activities of shortchanging final consumers through various means. This investigation was necessitated by our quest to contribute our bid by way of proposals to address the issue at hand so that we don’t get back to the same issues in the near future.
● Checks by COPEC revealed that the un-ending problems of fuel losses in various ways which are being discussed in this press conference form the basis of the suspicious actions taken by some of the Dealers.
1.0 Major factors leading to fuel losses
● Fuel is lost due to several factors which might lead to inability of dealers to meet their profit margins and sometimes struggle to break even. This phenomenon becomes the compelling factor that drives dealers to engage in unjustifiable acts like fuel pump adjustments and other means in order to meet their profit margins and as much as possible minimize losses to stay in business.
Two issues worth discussing are
1. Temperature losses
2. Short landing of fuel at the retail outlets
1.1 Temperature Losses
● Petroleum products sold in huge volumes are affected by temperature variation at the point of loading and at the retail outlets leading to contraction or expansion of the products between the two points. If the temperature at which dealers are selling is lower than the temperature at which the product was loaded/purchased from the BDCs, there are going to be losses to the retailer and conversely, if the selling temperature is higher than the purchased temperature the retailer will be making gains, but the latter is very much unlikely.
● Our checks revealed that the OMC Dealers in most cases purchase fuel from BDCs at temperatures which can go as high as (30 – 32)°C and by the time it reaches the final consumer, dealers will be selling at temperatures averaging 25°C depending on the location of the Retail Outlet. This may register up to 10°C temperature difference between the purchase and selling points. By the basic principle of contraction and expansion of fuel as a result of temperature variations, the consequential effect is that OMCs will be losing some judicious quantities of fuel which then makes it practically difficult for them to meet their profit margin, noting that a 100C temperature difference leads to about 1% volume difference. (Thus a 450,000 L may lead to almost 450 L variation). This loss burden is usually borne by the retailer or OMCs.
1.2 The unending Issues of Short landing of fuel in Fuel Transportation
● Suspected fuel short landing of fuel by some tanker drivers has continued to be the dilemma of truck owners and OMCs in the petroleum industry. COPEC can authoritatively report that this issue continues to persist despite frantic efforts to install tracking devices to check these dubious activities by some tanker drivers.
● There is a wide suspicion that some Tanker drivers and their mates make a kill by siphoning fuel from trucks and selling it off to some fraudulent dealers on their way to the assigned point of discharge. Some of these drivers are said to have hideout garages along highways where they carry out these illegal trades, leading to losses as much as 200 L to the final recipient.
● This fraudulent activities by the drivers lead to significant losses in fuel quantity forcing some dealers in engaging in some dubious activities of pump adjustments and others to make up for the losses.
2.0 Role of NPA in Compensating OMCs and Dealers for Temperature Losses
● Thankfully, the effect of temperature losses in the business of OMCs can be catered for by the NPA through the introduction of temperature loss control mechanisms to guide Bulk Distribution Companies to convert the temperature of lifted petroleum product from their storage tanks to a standardized temperature of 20°C when selling to OMCs. It has been brought to our attention that this facility previously existed but has not been in use for the past few years.
● What is done in some other countries is that there is a temperature compensation sensor in the meter of the fuel pump at the point of purchase to take care of temperature variation?
● A calculation software within the dispenser then uses the temperature information to
recalculate the volume, based on a stated reference degree (in this case 20°C) and calculates the new volume price on display.
● Therefore, the fuel pump considers volume changes as a result of temperature variation. These changes result in the fact that an OMC can sell the volumes they bought.
● It is our understanding that the NPA has constituted a loss control Committee to address this issue. This Committee as we also understand had set a temperature conversion standard of about 20°C for OMCs to purchase from BDCs. This measure as we have learnt from the OMCs would have helped in minimizing their losses but our checks further reveal that this has not been implemented yet and OMCs still purchase at temperatures of sometimes as high as 32°C.
3.0 Addressing the Issues of the short landing of fuel at the Retail Outlets.
● The short-landing issues as we found to pose a huge challenge to dealers, transporters, and OMCs all together. There should be a stakeholder collaboration to discuss the introduction of effective fuel control and management solution to check the activities of these dubious drivers. Stakeholders must come out with Solutions designed to monitor, save and optimize fuel-related cost.
● The introduction of GPS trackers and the placement fuel level sensors directly in the tankers will provide information on fuel levels and consumption. COPEC urges the NPA to offer training and sensitization to OMCs on the need and effective ways to use these devices to minimize short landing of fuel to Retailers.
● There is also what we call the fuel tank lid sensors which also allow monitoring by OMCs and truck owners to know when tanker lids are opened and closed whilst in transit. When tanker lids are compromised, alerts are sent to the owner which will go a long way to prevent fuel siphoning and to improve confidence in the delivery of fuel to the fuel retail outlets.