AOMC: Gold For Oil Policy Will Lead To Arbitrary Selection Of BIDECs, Unfair Practices

The Association of Oil Marketing Companies says the government’s attempt to import oil under the gold-for-oil policy must be done in a balanced manner to avoid any form of discrimination and ensure fairness to all licensed parties.

The association in a statement described as unfair the distribution of the products to some selected BIDECs, 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 program 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 program. 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 will 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 own stated 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.”

Read the full statement below: