OMCs forced into ‘cash and carry’ for fuel

Ghana's oil-marketing companies (OMCs) are raising concerns of the seeming introduction of “cash and carry” in fuel transaction by the Bulk Distribution Companies (BDCs).

Cash and carry is a phenomenon where services are only rendered after payment of cash.

The OMCs claim the phenomenon is creeping into the fuel industry as the BDCs are demanding money before supplying them with petroleum products.

“Cash and carry entails that it is only the service stations that will really get the products,” said Kweku Agyemang Duah, the Chief Executive Officer of the OMCs, on Tuesday, July 15.

Mr Agyemang Duah said the development is worrying as it has the likelihood to affect the OMCs.

“It does affect our balance sheet, our cash flow and even to the extent that our stations had to be literally dry before we go for another product,” he lamented.

He expressed fears for retail outlets in the rural areas, where fuel is said to take a long time before completely sold out.

“The adverse effect on us is the fact that we have invested hugely in these [rural] stations.”

He backed full cost recovery on petroleum products, noting that the recent price hikes announced by the National Petroleum Authority (NPA) are still not satisfying.

He insisted that the only way forward is for government to completely remove subsidies off the prices.

“There is no point in playing politics with fuel. Nobody should do that. Let the market forces determine the prices.”