Fifty percent of businesses operating in the Petroleum downstream industry in Ghana, are wholly Ghanaian owned companies. This signifies the Ghanaian success story of local content in the petroleum downstream industry in Ghana. This came to light when the Chief Executive of the National Petroleum Authority (NPA), Moses Asaga addressed more than 500 final year students of the School of Business, University of Cape Coast. The lecture focused on the developments in the petroleum downstream industry: prospects and challenges.
According to Mr. Asaga, in the petroleum downstream today, there are more than 3000 petroleum retail outlets, 82 Oil Marketing Companies (OMCs), 42 LPG Marketing Companies, 545 transporters with more than 2500 Bulk Road Vehicles (BRVs), 24 Bulk Distribution Companies (BDCs) and 2 Oil Trading Companies (OTCs) adding “Ghanaian ownership in these Petroleum Service Providers (PSPs) is 50% and that is a positive outcome of the deregulation process which is ongoing in the petroleum downstream industry”.
Mr. Asaga told the students that in 2013, 3.3million tonnes of petroleum products were consumed in Ghana owing to increased economic activities in the country. “As the economy continues to grow, this consumption pattern will increase” Mr. Asaga told the over 500 eager audience.
Explaining further, Mr. Asaga said with the rapid growth and expansion in the downstream industry calls for increased monitoring and enforcement of regulatory standards. “Until recently, more than 30% of the fuel consumed in Ghana was adulterated thereby compromising the quality fuel the consumer needs but with the introduction of our novel program called Petroleum Product Marking Scheme-PPMS, in less 12months, adulteration has been reduced to 1 per cent that is something NPA must be commended for” Mr. Asaga said.
Touching on the deregulation process, the Chief Executive of the NPA said, the deregulation process has made great impact on the industry and the economy but more needs to be done in boosting the infrastructural needs of the industry to meeting the increasing demand for petroleum products. Some of the challenges facing the industry are the slow process of price ‘De-control’ resulting in under recoveries (Subsidies) which are borne by government. Delay in subsidy payments is gradually making investment in the sector unattractive hence the Infrastructure bottlenecks in the supply chain.
Answering question on the significance of the recent 2 per cent reduction in prices of petroleum products, Mr. Asaga explained that “the 2% reduction in fuel price was very significant, because for just 2 weeks, this 2% reduction is 10million Ghana Cedis which has been given to consumers and in another 2 weeks that is 20 Million Ghana Cedis-if we decide to buy exercise books for every primary school child, this would be enough for every school-going child, in the oil business, we deal with volumes, the volume consumed is all that what makes the difference.”
The lecture was at the instance of the School of Business, University of Cape Coast to boost the understanding of the students as they near completing of their course. A Senior Lecturer of the University, Dr. John Gatsi, thanked the NPA for information and called for closer collaboration between industry and academia to boost national development.