GOIL’s dominance shielding economy from deregulation trap
Ghana Oil Company Limited (GOIL) is entrenching its leadership position in the downstream petroleum sector to help stimulate efficiency and quality in the fuel trade business while keeping prices within the reach of ordinary consumers.
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It is doing this by ensuring that the company is robust enough to continue dominating the fuel trading business through the distribution of quality products at realistic prices.
Beyond helping to instil sanity in the industry, a strong and resilient GOIL helps to check market distorting activities that could have arisen if a private player dominated the business.
As a state-controlled company dominating the market, GOIL’s Managing Director, Mr Patrick Akpe Kwame Akorli, said the company was successfully becoming a benchmark in the wholesale and retail business, all to the benefit of Ghanaians.
“GOIL is a commercial entity, yes, but unlike the private ones, we do not place profit first. We have the citizens and the country at heart and that influences whatever we do,” he said.
Price stability
The MD told the GRAPHIC BUSINESS on July 18 that the company’s striving for resilience was already bearing fruits, after it had successfully helped the economy to avoid the trap that mostly come with deregulation of the downstream petroleum sectors in Africa.
In Kenya, where private players are having a field day, Mr Akorli said deregulation had emboldened dominant private players to dictate prices and standards of products in the market, much to the disadvantage of ordinary consumers.
Although Ghana was prone to such a trap, the MD said GOIL’s dominance ensured that the country did not fall into it.
“We realised this challenge earlier and worked hard to ensure that GOIL offered the best price and standards in the market. This way, we become the benchmark and it forces the others to follow,” he said.
Currently, GOIL, which is an oil marketing company (OMC), and its bulk oil distribution (BDC) subsidiary, Goenergy Limited, control some 20 per cent and 22 per cent of market shares in their respective subsectors, leaving the remainder for the over 180 OMCs and BDCs to share.
The company’s impressive dominance in both sides of the divide means that its pricing and product specifications are virtually benchmarks for the companies trailing behind.
“The good thing about having a local company that is strong enough to compete is, you set the standard and it forces the others on line. That is what GOIL has been doing,” Mr Akorli said.
“If you have followed the market, you will realise that since we deregulated, prices have been fairly stable. This is because there is a local player that leads the way for others to follow and this is good for the citizens,” he said.