Accra — Consumers of petroleum products would soon park their vehicles and motorcycles as a result of a looming fuel shortage.
The Chamber of Bulk Oil Distribution Companies (BDCs) which blew the cover said the government had not paid its members an amount of GHC 1.5billion from subsidies due them.
As a result of the indebtedness, the Chief Executive Officer of the Chamber, Senyo Hosi said their banks had denied them lines of credit because of the rising debt level.
He explained that the fuel price should have gone up last week but the government decided to absolve it. This, he noted, meant that an estimated GHC 40million will be spent on subsidy for the recent price that was not adjusted.
He explained that; “in the past year we have managed to keep the level of stock very reasonable. We have had strategic stock up to about four weeks and even sometimes for about 6 weeks-enough stock that is accessible. As we speak, we have less than two weeks stock. In my estimation, that should be about 1.3 weeks. When you are at that level, there is one thing in your face- queues and shortages.”
“It is not because BDCs do not want to import, but because those who fund BDCs find our transactions so risky because subsidies are sucking a lot of liquidity from the industry,” he further stated.
The chamber of BDCs CEO therefore called for the full implementation of the automatic adjustment without interference.
When ItNewsGhana reached the Public Relations Officer of the National Petroleum Authority (NPA) , Yaro Kasambata to ascertain the authenticity of the claim mentioned above, he said "we are holding a meeting over the matter."
This week consumers of petroleum products in the country breathed a sigh of relief as prices of petroleum products remain unchanged. According to the National Petroleum Authority's (NPA's) latest review of the prices of petroleum products, it maintained the prices against the backdrop of insecurity in Iraq, which pushed a barrel of crude oil to $106.90 as at yesterday.
Crude oil, particularly Brent Crude, was projected by Wall Street analysts to average as much as $116 a barrel by the end of the year.
Now, with violence escalating in Iraq, which is the second largest oil producer in Organization of the Petroleum Exporting Countries (OPEC), representing the largest source of growth among the 12 member countries.
The international benchmark surged above $114 on June 13 last week for the first time in nine months, as militants routed the Iraqi army in the north and advanced toward Baghdad, threatening to ignite a civil war.
The NPA review took effect from Monday. This implies that consumers in Ghana would be buying petroleum products at the old prices.
Petrol is still going for GH¢2.73 per litre, diesel GH¢2.68, kerosene GH¢2. 61, premix GH¢1.25 and liquefied petroleum gas (LPG) goes for GH¢ 2. 87 per kilogram. The last time the prices changed was in April 16, this year, when diesel fell by about 4 percent.
Figures from the Ghana Chamber of Bulk Oil Companies indicated that an estimated GH¢40 million would be spent in this price subsidy. So far, the Ghana government has spent about GH¢175 million in the past eight weeks on price subsidies. Oil prices have remained persistently high and volatile in the past few years and according to estimates they may remain so until 2014.
The Brent crude spot price, which averaged US $112 per barrel in 2012, is projected to remain above US $100 per barrel at an average of US $108 and US $101 per barrel in 2013 and 2014, respectively (U.S.). High oil prices may dampen the global economy which is still struggling to recover from the 2008 financial crisis, according to economists.
High oil prices above US $100 can be explained by many factors and they may affect economies in an uneven way, with an unclear outcome for the global economy as a whole. According to estimates by the International Monetary Fund, a 50 per cent increase of oil prices due to a supply shock would lead to a one to 1.5 per cent decrease of output in many regions of the world.