Full Deregulation Key To Unlock Periodic Fuel Shortages - AOMCs
The Association of Oil Marketing Companies (AOMCs) has stated that full deregulation of the petroleum market is key to unlocking the nation's intermittent fuel shortages debacle.
Mr. Kwaku Agyemang-Duah, AOMCs Industrial Coordinator, told the Ghana News Agency in an interview at the weekend that, the lifting of certain governmental interventions such as price control on several aspects of the oil industry will eliminate undue government interference in the pricing, export and importation of oil products and the establishment of retail outlets.
He said a deregulated regime will also empower oil marketing companies to import petroleum products directly from foreign suppliers, which will enhance competitiveness on the market.
He explained, however, that a deregulated regime does not mean that the government will loose all power and responsibility over the industry.
"While importers can import the volume they need and from whatever source, they will have to notify the NPA of intention, deeds and processes of any importation."
"The importer also needs to make sure that any importation conforms to international standards of quality and specifications”, Mr. Agyemang-Duah stated.
He debunked the notion that deregulation will lead to fuel price hikes, stressing that deregulation will rather make the industry more competitive and offer the customer alternatives as to which fuel station or company to patronise.
Mr. Agyemang-Duah said on the contrary, deregulation and competition will encourage oil companies to be more effective and efficient; they will be compelled to improve their service.
"Under a regulated set-up, however, domestic oil companies have few reasons to strive to meet "world class" standards because the oil companies are guaranteed returns on their investments hence there is no incentive for them to stretch to provide customers with better services."
He said: "However, under a deregulated environment, the industry players would have to compete aggressively against each other for customers and consequently, returns on their investments".
On the other hand, it should be noted that with the deregulation of the industry, the industry participants cannot resort to malpractices such as violating environmental laws or under filling of LPG cylinders, he stressed.
According to Mr. Duah-Agyeman, in March 2003, Government reconstituted NPTB with Professor Ivan Addae-Mensah as chairman, which lead to a meeting with OMCs on accelerated deregulation programme and the drawing up of a road map to deregulate the oil industry.
He said as part of the road map, a National Petroleum Planning Committee was inaugurated in March 2004 after which the first tender of the importation of finished products took place under a deregulated regime.
In July 2005, a Nation Petroleum Authority was inaugurated to replace NPTB, and the implementation of the NPA Act 691.
Source: GNA
