Prices of petroleum have been reduced by 15 percent as a result of deregulation exercise
Contrary to calls by the Chamber of Bulk Oil Distributors (CBOD) for prices of petroleum products to be reduced by 25%, various Oil Marketing Companies have only sanctioned a close to 15% reduction in price of petrol.
This follows the pressure on the oil marketing companies (OMCs) to reduce the fuel prices.
But there is disagreement over the pricing of petroleum products for consumers between wholesalers and retailers of the products.
The Ghana Chamber of Bulk Oil Distributors has given an indicative price reduction of 26.26 per cent on premium, gas oil, liquefied petroleum gas (LPG) and kerosene but the oil marketing companies have reduced the prices by between 11 and 15 per cent.
The CBOD yesterday released an outlook of indicative prices for petroleum products for the next one week to the media, using world market prices for finished products, but the Association of Oil Marketing Companies (AOMCs) says such projection is not achievable.
The Chief Executive Officer (CEO) of the AOMCs, Mr. Kwaku Agyemang-Duah, told the Daily Graphic that the CBOD indicative figures were impossible for implementation by his association.
“Petroleum products are laden with so many taxes that it is virtually impossible to sell them at 100 per cent less even if world market prices dropped by 100 per cent,” he noted.
According to him, returns for his members were far less than the taxes they paid on products.
Mr. Agyemang-Duah disclosed that although the CBOD was the mouthpiece of bulk oil distributors (BDCs), importers of finished products, the BDCs themselves quoted varied prices to OMCs, stressing, “The CBOD is quoting a different figure from its members.”
“A lot of factors go into the pricing of petroleum products and for that reason it is not possible for prices to drop further in this pricing window.
“We pay 17 per cent tax on our products, aside from the other operational costs we are faced with on a daily basis,” he explained.
On Wednesday, 15 July, 2015, the Bulk Oil Distributors have released the formula used in pricing petroleum products.
The methodology that will be released every week, will let consumers appreciate and understand what goes into pricing petroleum products.
Click here to read the formula: Petroleum pricing formula