Fuel Prices GOIL denies government subsidy allegation

The Chief Operating Officer of GOIL, Alex Josiah Adzew, said since GOIL is a listed company and it cannot be subsidized by the government.

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State-owned oil company GOIL has denied allegations that government subsidises the state-owned oil companies to ensure prices remains unchanged even when there is supposed to be price hikes.

The Chief Operating Officer of GOIL, Alex Josiah Adzew, who spoke to the B&FT said the accusations must be disregarded since GOIL is a listed company and cannot be subsidized by the government.

“We have over 16,000 shareholders. So, this tag of being a state-owned enterprise should be discounted. We are operating as a fully commercial enterprise accountable to our board of directors who represent shareholders, including government.”

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 “And let me say that though all the OMCs hiked their prices in July 2015 when the deregulation started, we, as GOIL, did not and we were out there explaining to customers and the general public why we did not see the need to do so.”

He said this decision by GOIL increased the volumes they sold at their service stations from about 48 million metric tonnes to 67 million metric tonnes per month.

“That is what caused them [private OMCs] to reduce their prices in August last year because they saw the numbers go up for GOIL services stations across the country.”

“…and trust me, anytime that we have not been high profit-minded the volumes have catered for the margin we lose and we don’t realise the margin slashed off.”

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He mentioned that they are able to leverage because of the number of outlets they have in the country hence the bargain.

He, therefore, asked the other OMCs and the BDCs to negotiate for better deals by using their numerical strength and presence in the places in the country.

The Chamber of Bulk Oil Distribution Companies (CBOD) has accused that government of subsidising the state-owned oil companies to ensure prices remains unchanged even when there is supposed to be price hikes.

The Chief Executive Officer of the Chamber Senyo Hosi told B&FT that the government does this to help the state-owned oil company to outcompete the oil companies in the private sector.

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