Oil marketers call for national debate on petroleum deregulation
Association of Oil Marketing Companies (AOMC) on Tuesday called for a national debate on full deregulation of the petroleum sector.
The Association’s main contention is lifting of some government controls such as prices.
Mr Kwaku Agyemang-Duah, AOMCs Industry Co-ordinator, told the Ghana News Agency in an interview that full deregulation of petroleum in the country was a necessary step to ensure a more balanced supply and ensure sustainability.
He said due to the constant rise of the price of crude oil on the world market and an impending debt, the state could not continue to provide fuel at such low cost since it would hamper development of other sectors and added “a permanent solution is full deregulation”.
Mr Agyemang-Duah said “as a country we have to decide whether the state should or should not interfere with the pricing, export and importation of oil products. Large business establishments and government corporations can also import their fuel requirements,” he said.
He said it was not true that full deregulation would necessarily lead to price increment, stressing: “Deregulation will also make the industry more competitive”.
He said deregulation would lead to attainment of maximum efficiency in investments and operational performance and to ultimately meet standards on quality and safety at equitable prices.
Mr Agyemang-Duah said “Deregulation and competition encourage oil companies to be more effective and efficient; they are compelled to improve their service. Under a regulated set-up, however, domestic oil companies have little reason to strive to meet world class standards.”
“Under a regulated set-up, the oil companies were guaranteed returns on their investments. Hence, there is no incentive for them to provide customers with better service.
“However, under a deregulated environment, the industry players would have to compete aggressively against each other for customers, and consequently, returns on their investments”.
Mr Agyemang-Duah said price differentiations in the telecommunication industry should serve as a hint to what Ghanaians should expect in petroleum deregulated regime.
“Under deregulated environment, prices are allowed to rise and fall with market levels….the State therefore will be able to use money which should have been used for subsidy for vital services and infrastructure, such as school buildings, bridges, roads, and hospitals,” he added.
Mr Agyemang-Duah said: “We must not shy away from the issue we should face it, debate and immediately decide on the way forward.”
The National Petroleum Authority (NPA) recently adjusted petroleum prices citing the rise of crude oil price on the world market.
This has led to calls on the government from some political parties, civil society organisations and business to reduce the price.
Source: GNA