Chief Executive Officer of the Ghana Chamber of Bulk Oil Distributors, Dr. Patrick Kwaku Ofori, has disclosed that his members are currently bleeding due to the scabrous economic conditions they have to operate in.
According to him, those who are still doing business are really having a terrible time and are most likely, being driven to continue trading in order to make up for the huge losses they have accrued in earlier trades.
Dr Ofori indicated that the present economic situation has led to some distributors taking a break from the business, to wait for things to get better in order not to accrue any more losses.
“You regularly would not see that, but some of them who wanted to tread cautiously decided that ‘you know something, enough, I’m not trading. We’ll sit down and then look at how the market will behave and when things normalize before we come in.”
Dr Ofori
He further disclosed that there are other members who are risk averse and love to take those gambles.
“But I can tell you most of them are bleeding. And I go into meetings with some of our members, you look straight into their eyes and you could clearly see that it’s difficult times for some of them.
“It’s like a gambler who is losing but still has got faith that things are going to improve and that you need to continue to play before you can recover some of the losses that you have made. And clearly it hasn’t been easy.”
Dr ofori
Meanwhile, according to Dr Ofori, an insufficient supply of dollars in the local market has made it even more difficult for distributors who are currently holding billions of cedis in their bank accounts to change to dollars to pay their suppliers.
He noted that the main problem affecting them is the depreciating cedi amid hike in fuel prices in the international market, as well as insufficient dollars to pass around in the local economy.
“You know there was a point in time that when the Russia-Ukraine war started and there was that fear of product shortages world over and other things. So a lot of products were imported in town. We brought in a lot of products in-country, and then the cedi started misbehaving.
“You’ve lock in these products at a certain rate, by the time after you’ve sold the product and you’re going to buy forex it has started going a certain trajectory.”
Dr ofori
He stated that the rapid depreciating of the cedi against the dollar has cost many distributors millions of dollars in losses; this he said has been exacerbated by the increasing price of fuel on the international market, currently on a steady rise.
“So most of the members in order to keep their credit lines open and then also to keep their banks happy needed to even give super abnormal discount on products knowing clearly that they were even going to make some losses.
Dr
Dr Ofori mentioned that one of the major players has a dollar obligations of a minimum 23 million dollars a week, whilst the Bank of Ghana gives them 120million dollars a month and its about just one player.
Fuel Price Increament Allowed To Prevent Shortage
Meanwhile, the Director of Commmunication at the National Petroleum Authorities (NPA), Mohammed Abdul-Kudus, has stated that the company has allowed oil marketing companies to adjust prices outside the stipulated pricing windows.
According to him, this is to prevent shortage of fuel in Ghana. He added that this is as a result of the cedi depreciation.
“Given the fact that the products are actually bought from the world market in dollars, anytime the dollar changes, its affects the character of the pricing.”
Dr Ofori
He further indicated that, they ought to have been operating with the two weeks window framework, but because of the volatility of the cedi against the dollar, and the fact that they ought to be a little flexible with what will be established with the windows within which the prices are supposed to be varied.
The price of petrol and diesel has increased t GHc17.99 and GHc23.49 respectively, at various pump in the country.
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