Accra, Dec. 4, GNA – Mr Seth Terkper, Minister of Finance, has noted that the country needs stronger indigenous oil marketing companies (OMCs) to propel the economy.
“With a growing Oil and Gas economy, vibrant indigenous OMCs are what we require to make our local content policy succeed. Ultimately, a stronger and financially solvent indigenous OMC is good for a stronger cedi.
“As we embrace competition, it is important indigenous OMCs up their game and strengthen their capital base, so that they can rub shoulders with other multinationals and also be players in sectors such as the bunkering, which demands huge financial commitment,” Mr Terkper stated at GOIL end-of-year award and dinner in Accra.
The Finance Minister noted that GOIL continue to play crucial role in stabilizing the once turbulent petroleum marketing sector. Indeed, the performance of indigenous companies like GOIL has vindicated government’s decision to de-regulate the sector in July 2015.
“I would like to recall that when government took that decision, some in the industry were concerned that a liberalized environment will result in increased prices, which will not be beneficial for the consumer.
“The other concern was the thought that government will lose control of this critical sector,” he said.
Mr. Terkper however noted that, the deregulation of the petroleum downstream sector has had a positive impact on government’s finances and has cushioned the country tremendously, the shocks associated with crude price volatility on the international market.
“For instance in 2013, Government spent a whopping US$2.6 billion to import finished petroleum products from Europe for local consumption. After deregulation, data from the National Petroleum Authority (NPA) indicates that the Bulk Oil Distribution Companies (BDCs) accounted for 74 per cent of the imports, while government institutions imported the remaining 26 per cent.
“Clearly a huge financial burden was removed from government after deregulation.
“Let me emphasize that, it is in pricing that the effects of deregulation has greatly impacted on the consumer.
“No doubt, government’s decision to de-regulate the petroleum downstream sector has brought about stiff competition and compelled players in the sector to reduce their prices which have eventually benefitted the consumer,” the Finance Minister noted.
Speaking on the topic; “The relevance of indigenous OMC in the de-regulated petroleum downstream industry in Ghana,” Mr. Terkper said indigenous OMCs have a stabilizing role to play.
“Let me also put on record the important role GOIL has played in stabilizing the market and helping the consumer to get fairer fuel prices on the market,” he said.
He however noted that other indigenous OMCs can only play that role if some of them can consolidate and muster the financial muscle.
Professor William Asumaning, GOIL Board Chairman, noted that GOIL continued to focus on growing its core business through value-added joint venture engagements, take-over of distressed competitor stations and acquisition of new stations.
He said despite the challenging market conditions and stiff competition, the Company achieved the biggest market share among the over 80 Oil Marketing Companies.
GOIL’s fuel sales during the year 2015 exceeded its own target and remains on course in the retail business through competitive pricing, offering quality additivated products, value for fuel purchased by our cherished customers and maintaining a high level of visibility by the strategic spread of its stations.
Prof Asumaning said in June 2015, when the other Bulk Distribution Companies (BDCs) were finding it difficult to import finished petroleum products into the country, BOST together with GOENERGY (a subsidiary of GOIL) rose up to save the situation.
“As a result, the country did not experience any significant fuel shortage. Once again, GOENERGY’S contribution to the implementation of the deregulation exercise in the country is a success story we can all share,” he said.
He said the synergy between GOIL and GOENERGY has pushed the Company as a group to grow to a level we are all proud of.
Prof Asumaning therefore commended GOIL Board, Management, staff, Filling Station attendants, customers, the media and other stakeholders including Banks for supporting GOIL.
Mr Patrick Akpe Kwame Akorli, Group Chief Executive Officer of GOIL, received award for over 20 years dedicated service to GOIL in several subordinated positions.
Mr Akorli has worked through the ranks to his current position as the Group CEO and Managing Director.
Other staffs who have worked between ten and 35 years of service were also awarded.