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26.03.2009 Business & Finance

Oil companies feeding fat on fuel shortage?

By Daniel Nonor - Ghanaian Chronicle

Parts of the Accra Metropolis have been experiencing fuel shortage at some fuel stations since the beginning of the week. Meanwhile, at all the fuel stations where petrol (supper) was in short supply, there was in stock special petroleum products, example Shell's V-Power and Total's Effimax, which prices were much higher than the normal petrol (super) on the market.

The Tema Oil Refinery (TOR) has in the wake of the situation made a statement to the effect that the refinery had made constant supply of the commodity to the market, hence they do not fathom the reason for any shortfall of fuel on the market.

TOR said it had supplied 1.5 million litres of gasoline, adding that on the average between 2.8 and three million litres of gasoline was supplied daily.

Mrs. Lokko, Public Relations Officer of TOR, explained that 2.8 million litres of gasoline was supplied to the market last Monday.

This situation has, however, given room for speculation in sections of the public, which suggests that the oil lifting and trading companies in the country were either deliberately hording the commodity to market their special fuel products, or anticipating the next petroleum price review, which market watchers say could be adjusted upwards, considering the recent upsurge in prices on the world market.

Association press reports that Oil prices leapt above $72 a barrel on Wednesday, settling at a record high for the third straight day after a government report showed shrinking U.S. gasoline supplies, and traders fretted about nuclear tensions between Iran and the international community.

Supply constraints in Iraq, Nigeria and the Gulf of Mexico was said to be pushing oil prices higher, and analysts are predicting more pain at the pump this summer for motorists, who so far appear to be only lightly tapping the brakes on demand.

Light sweet crude for May delivery climbed as high as $72.40 a barrel, before settling at $72.17 on the New York Mercantile Exchange, an increase of 82 cents from the previous day. The contract had risen as high as $71.60 on Tuesday.

Oil futures contracts through July 2009 are now trading above $70 a barrel. “In effect, the market is saying this is going to be with us for a while,” said A.G. Edwards & Sons, commodity analyst Bill O'Grady.

Snippets of information picked up by The Chronicle indicate that the commodity must have found a good market in neighboring countries where prices are said to be much higher than what pertains in Ghana, indicating that there could be smuggling of the fuel from Ghana to these countries, hence the shortage at the pumps.