The implementation of new government policies designed to stabilize Ghana’s currency is having unintended consequences for many locally-owned oil distribution companies, according to Dr. Patrick Kwaku Ofori.
Dr. Ofori, CEO of the Ghana Chamber of Bulk Oil Distributors, said bulk distributors that are owned by Ghanaians are collapsing due to the policies introduced by authorities.
“A lot of Ghanaian owed BDCs are collapsing because of the policies that have been initiated,” Dr. Ofori said on Accra-based JoyNews’ PM Express on Tuesday, May 14.
The policies in question include the Gold for Oil program launched last year, where Ghana trades gold for petroleum products from oil exporting countries like Saudi Arabia and Qatar in order to reduce reliance on hard currency for oil imports.
While meant to stem the depreciation of the cedi, Dr. Ofori notes that the fluctuating exchange rate is severely impacting distributors’ bottom lines.
Fuel prices are set based on international rates and the cedi’s strength at the time of purchase, yet distributors are stuck selling at pre-determined margins.
“In February when the first consignment came in, the international price for diesel was 854. Currently it has gone by 11% but the exchange rate is the main problem,” he said.
There are also concerns over the amount of fuel now being supplied directly through the state-owned Bulk Oil Storage and Transportation Company (BOST), which accounts for 40% of domestic supplies.
Dr. Ofori questioned how independent BDCs can survive when such a huge portion of fuel bypasses them.
