The Centre for Environmental Management and Sustainable Energy (CEMSE) is proposing that Oil Marketing Companies (OMCs) offer a minimum margin of 50 percent to their dealers in order to retain them.
The Centre cited three major OMCs—Goil, Total, and Shell—that have experienced declines in sales volumes and revenue from their dealers between January and August 2024 due to lower margins between 18 pesewas and 40 pesewas per litre of fuel.
“Oil Marketing Companies (OMCs) such as GOIL PLC, Total Energies Ghana Limited and VIVO Ghana (SHELL) have business models that allow Dealers to own or manage fuel retail outlets using the brand names of these companies.
These OMCs, depending on their contract with their dealers are allocated a margin from 18 pesewas per litre to 40 pesewas per litre. Dealers who have invested much in building their fuel retail outlets are allocated up to 40 pesewas per litre.
“Also, Dealers who only manage fuel retail outlets built by these listed OMCs are allocated as low as 18 pesewas depending on the OMC and their contractual terms,” CEMSE said in a statement.
In an interview with Channel One News, the Executive Director of the Centre, Benjamin Nsiah called for higher dealer margins to prevent dealers from moving to other OMCs with better offers.
“From CEMSE’s observation, pricing is a major determinant of sales in the petrol and diesel retail market. OMCs that offer comparatively affordable prices attract and retain petroleum users, and increase their sales.
Therefore, GOIL, TOTAL and VIVO (Shell) must relook at their pricing strategies to offer competitive prices that support their growth in the retailing of petrol and diesel.
“These companies should also relook at the margins they offer their Dealers to attract and retain Dealers. OMCs must offer at least 50% of the OMC margin to the dealers otherwise they will lose these dealers to other OMCs who offer better contracts.”
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