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19
Tue, Sep
Graphic Stanbic Executive Breakfast Meeting

Oil companies in distress - likely to lose GH¢1bn to smugglers in 2017

Mr Johnny Blagogee (middle), Chairman of the Association of Oil Marketing Companies (AOMC), interacting with some members of the association. Picture: Maxwell Ocloo

The Association of Oil Marketing Companies (AOMCs) has sent a distress call to the government to save the businesses of its members from the activities of black market operators in oil products.

More than 4,000 employees of OMCs risk losing their jobs at the end of this month if the menace posed by black market trading in petroleum products continues.

The association, which has 102 members, has since given a 48-hour ultimatum to the government to halt the activities of black market traders.

At a news conference in Accra yesterday, the Industry Co-ordinator, Mr Kwaku Agyemang-Duah, said: “Since 2016, our market has been inundated with the black marketing of petroleum products in huge quantities in a manner that is beyond imagination.”

According to him, the association had sent numerous notifications to the National Petroleum Authority (NPA), all to no avail, for which reason, “given the gravity of the situation, we are giving the government 48 hours to bring this menace to an end.”

“We firmly believe that the government has the requisite authority, tools, instruments and relevant resources such as security institutions to stamp out this menace within this period,” Mr Agyemang-Duah, said.

The problem

Flanked by the Managing Director of GOIL, Mr Patrick Akorli, and the Managing Director of Strategic Energies Limited, Mr Johnny C. Blagogee, Mr Agyemang-Duah said there was a looming revenue loss of GH¢1 billion for 2017.

He said the government lost GH¢850 million last year as a result of a huge drop in the sale of legitimate petroleum products by OMCs by a margin of nine per cent when it ought to have rather increased by three per cent.

“It is estimated that if this issue is not stopped now and the trend continues, the government will be losing over GH¢1 billion by the end of this year.

“We, indeed, witnessed a volume drop by 19 per cent in February 2017. This is very very alarming,” Agyemang-Duah, said.

The trend, he said, was obviously going to negatively affect the government’s revenue projections and that would trickle down to affect the provision of basic infrastructure for citizens.

He further warned that the products being sold on the black market were way below standard and, therefore, undermining efforts to give the consumers the best quality products.

Mode of operation

Mr Agyemang-Duah said the culprits posed as exporters, enjoyed low taxes and subsequently diverted fuel products they were expected to export to Mali and Burkina Faso back to Ghana and sold them at prices lower than those of the OMCs whose prices contained what he termed as “full blown taxes/levies.”

“The failure of institutions to stop this has led to the recent soaring interest by entities in acquiring export licences,” he said.

He alleged that the culprits discharged petroleum products on the market from uncustomed vessels and boats at odd hours.

“They discharge these products into tankers at the ports, without them being arrested by the security agencies and the regulatory authorities, notwithstanding the fact that the ports and the various depots have a significant presence of institutions which have been mandated to check such malfeasance,” Mr Agyemang-Duah complained.

Another problem he highlighted was the illegal diversion of non-taxed industrial products for sale as petrol, which he said was destroying the businesses of genuine operators.

 

The acts of black market operators, he said, were a threat to national security, the survival of the banking industry, the provision