GOIL, TotalEnergies, and Shell, once dominant in Ghana’s downstream petroleum sector, have experienced a decline in market share over the past few months, according to data from the National Petroleum Authority (NPA).
The NPA reported a decrease in petrol and diesel sales for these companies in August 2024 compared to January 2024.
GOIL’s sales dropped from 56,281,500 liters in January to 52,886,500 liters in August, reflecting a 6% decline.
TotalEnergies saw a decrease from 31,302,000 liters to 30,294,000 liters, a 3% drop, while Shell’s sales fell from 38,651,600 liters to 37,004,700 liters, indicating a 4% decline.
In response to the findings, Benjamin Nsiah, Energy Analyst and Executive Director of the Center for Environmental Management and Sustainable Energy (CEMSE), emphasized the need for the three dealers to reassess their pricing strategies.
He urged them to adopt competitive pricing that would facilitate the growth of petrol and diesel retailing and prevent further market share losses.
“These companies should also relook the margins they offer their dealers in order to attract and retain the dealers”, he said.
The three companies are reportedly paying their employees low salaries due to reduced volumes and narrow profit margins.
Mr. Nsiah urged the oil marketing companies (OMCs) to allocate at least 50% of the margin to the dealers; otherwise, they risk losing many to competitors offering better contracts.
“The 6% decline by GOIL, 3% decline by TotalEnergies and 4% decline by Shell imply that, revenues of dealers of each of the listed OMCs have declined respectively although their costs structures remain constant or seen an upsurge. These constant costs include compensations including SSNIT, Cost on credits (Interests payments), Utility Bills, Sanitation and Hygiene bills, and localized payments to their operational districts.
A comparative analysis of NPA data reveals that dealers associated with GOIL generated revenues between GH₵23,000 and GH₵38,000 in January, but these figures fell to GH₵21,000 to GH₵36,000 in August. Meanwhile, Shell dealers saw their revenues drop from GH₵28,000 to GH₵60,000 in January to GH₵26,000 to GH₵27,000 in August. Similarly, TOTAL Energy dealers’ revenues decreased from GH₵20,000 to GH₵35,000 in January to GH₵18,000 to GH₵32,000 in August.
An observational study by CEMSE indicated that dealers struggle to cover costs due to shrinking margins and declining sales.