The Chief Executive Officer of the Ghana Chamber of Bulk Oil Distributors, Dr. Patrick Kwaku Ofori, says Bulk Oil Distributors are currently bleeding due to the harsh economic conditions they have to operate in.

Speaking on JoyNews’ PM Express Business Edition, he explained that the prevailing economic situation has led to some distributors taking a break from the business to wait out the storm in order not to accrue any more losses.

Those who continue to trade, he said, are really having a terrible time and are most likely being driven to continue trading in order to make up for the huge losses they have accrued in earlier trades.

“You normally would not see that, but some of them who wanted to tread cautiously decided that ‘you know something, enough, I’m not trading. We’ll sit down and then look at how the market will behave and when things normalize before we come in’.

“There are others who are also risk averse and who love to take those gambles. But I can tell you most of them are bleeding. And I go into meetings with some of our members, you look straight into their eyes and you could clearly see that it’s difficult times for some of them.

“It’s like a gambler who is losing but still has got faith that things are going to improve and that you need to continue to play before you can recover some of the losses that you’ve made. And clearly it hasn’t been easy,” he said.

H noted that the main situation affecting them is the depreciating cedi amid fuel price fluctuations on the international market, as well as insufficient dollars to pass around in the local economy.

“You know there was a point in time that when the Russia-Ukraine war started and there was that fear of product shortages world over and other things. So a lot of products were imported in town. We brought in a lot of products in-country, and then the cedi started misbehaving.

“You’ve lock in these products at a certain rate, by the time after you’ve sold the product and you’re going to buy forex it has started going a certain trajectory,” he said.

He noted that the rapid depreciating of the cedi against the dollar has cost many distributors millions of dollars in losses; this he says has been exacerbated by the fluctuating price of fuel on the international market, currently on a steady rise.

“So that notwithstanding, about the volumes of products that you’ve brought in-country that I was talking about and then also maturing LCs that you quickly need to cash in on. So most of the members in order to keep their credit lines open and then also to keep their banks happy needed to even give super abnormal discount on products knowing clearly that they were even going to make some losses.

“Because they needed to meet those obligations because the sanctions and other things that are linked to not being able to honour your LCs and then also not being able to honour your commitment in terms of open credit and the consequence to your business reputation and your ability to even stay afloat,” he said.

Meanwhile, an insufficient supply of dollars in the local market has made it even more difficult for distributors who are currently holding billions of cedis in their bank accounts to change to dollars to pay their suppliers, he said.

“One of our major players has a dollar obligations of a minimum  23 million dollars a week, whilst the Bank of Ghana gives us 120million dollars a month. And I’m talking about just one player. So you look at the challenges that they go through.”