By: Foday Manneh
The Oil Marketing Companies (OMCs) in The Gambia have announced that they will cease operation on Monday, 17th October 2022, due to debts confronting their businesses. They blamed the government for their current predicaments.
“The government is recouping D17.99 per liter, compared to the OMCs 0.78 bututs per liter. How does this make sense?” They asked in a dispatch.
“The bottom line is, we are on the brink of closing our businesses with millions of dollars in debt, and therefore, we wish to inform the public that we have no other choice than to cease operations, a statement from OMC said.
In early September, The Gambia Transport Union and Pumping Stations across the country had a similar sit-down strike, citing the hike in fuel price.
These protests sparked outcries from the public, who said their daily activities were interrupted by the actions of the transport union and dealers in fuel.
“We, the OMCs, have a sense of responsibility as suppliers of petroleum products, employers, taxpayers, and as business entities to inform all and sundry of a crisis that the country is now facing concerning the availability of fuel.” The release added.
The release further outlined why they have been forced to shut down their operations; amongst them is the government’s fuel price structuring, insufficient quantities of US Dollars to pay suppliers for fuel, and inability to receive credits from banks for fuel supply.
“In addition, these pricing structures have been such that government only cares about recouping as much revenue as possible from the amount it claims to have subsidized in recent months. Their efforts are risking the continuity of businesses in the sector,” the Oil Marketing Companies
added.
The OMCs explains that the margin for the importer of Gasoil is D2.60 per liter and for marketing companies is D5.05 per liter which shows a total margin of D7.65 per liter.
“On the costs, the government price structure exchange rate is D55.74, while the market rate is D62 with a difference of D-6.26 per liter,” They noted.
The companies also said the difference between the government’s price structure letter of credit rate at one point five percent (1.5%) and the real letter of credit at two point five percent (2.5%) is D-0.61 per liter with a total margin of D0.78 bututs per liter.
This, however, does not account for additional costs, such as transportation costs for fuel distributions, maintenance of standards imposed by the regulator, and bank charges.
