The Association of Oil Marketing Companies (AOMCs) has expressed unhappiness about the government’s plan to distribute imported fuel under the gold for oil programme to only a few selected Bulk Import, Distributing and Export Companies (BIDECs).
Last month, the West African nation’s strategic stock keeping company, Bulk Oil Storage and Transportation Company (BOST), took delivery of 41,000 metric tons of diesel under the government’s gold for oil programme.
Media reports suggested that BOST distributed the products, resulting in a reduction in diesel prices by OMCs that had a share of the products.
In a statement issued by the Association of Oil Marketing Companies (AOMCs), it described the move as unfair, adding that it does not augur well for market fairness.
“We note that the declared fact that the imported quantity of products under the Gold for Oil programme is inadequate to meet the monthly consumption of the country and the indication that BOST is compelled to restrict distribution of the products to selected BIDECs to the exclusion of others, notwithstanding that the product is bought and imported with public funds, does not augur well for market fairness.
“The indicated mechanism allows for arbitrary selection of BIDECs, and by extension OMCs to benefit from the programme. Also, the fact that this mechanism is intended to force players to reduce prices at the pumps creates some form of arbitrariness which will eventually distort the market and create an uneven playing field.”
According to the Association, a rationalized mechanism such as liftings on a “first come, first served” basis or any other approach that gives equal opportunity to all licensed parties to access the products would be legitimate and justifiable as providing for a fair distribution of the product to the market.
“It is further worth highlighting that the indicated distribution mechanism has the potential to result in preferential treatment for some industry players which is statutorily and constitutionally untenable as it does not only contravene the Government’s stay policy of operating a deregulated market but also unacceptably impacts the commercial competitiveness of other players in a rather unfair manner. This will also challenge the long-term viability of the industry.”
Below is the link to the full statement by the Association of Oil Marketing Companies
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