Unstable oil prices affecting petroleum downstream business, threatening jobs
The Association of Oil Marketing Companies (AOMC) has lamented the dire effects of unstable global oil prices on the operational sustainability of its members, which is also threatening jobs in the sector.
According to Kweku Agyeman-Duah, the Association’s Chief Executive, petroleum products had become so expensive for local players due to the global oil price instability, preventing some of them from lifting products and forcing them to suspend operations.
“In April, 45 oil marketing companies could not lift products because it had become too expensive. This means that the stations of these oil marketing companies will be dry. They have to wait and gather some money before they come back into business, and almost all these companies are indigenous. They have no external cash flow to depend on. It has not been easy; companies now need to be very tactical,” Mr Agyeman-Duah told the media.
The Oil Marketing Companies are not alone in this predicament as effects of the situation extends to Bulk Distributors as well.
“The BDCs are also careful they do not lose out due to the sharp price increase on the world market; so, the sector is really under distress,” he added.
Fearing a possible loss of jobs in the sector, the Chief Executive has called on government to fashion out some measures to help mitigate these effects on the players.
“During this same time, if you look at the upstream, the price is going up and the country will be making some more money from it. So, we think a national conversation should go on how best some sort of subsidy can be introduced to help cushion the sector. Maybe we could use the extra profit from the upstream sector,” he said.
Source: Energy Sector