The recent growth in the petroleum growth in the Ghana’s petroleum downstream by about 115% from about Ghc33 billion in 2021 to about Ghc71 billion in 2023.
The surge in sales volumes of the industry is expected to improve the welfare of the employees within the final end of the value chain of petroleum distribution and marketing in Ghana by providing decent work.
The international labour organization defines decent work as an employment that offers equitable income, job security, social protection, bargaining power, workplace equality among employees and better prospects for personal development and integration.
However, a study conducted by Centre for Environmental Management and Sustainable Energy (CEMSE) reveals that most Oil Marketing Companies (OMCs) especially those with dealer owned and dealer managed filling stations do not provide decent work for their fuel attendants.
Looking at the hazardous and risky environment within which employees operate, this workforce is paid between Ghc600 and Ghc1200 with no medical allowances and insurance policies to cover them and their family in times of need.
Most of the employees of these OMCs surveyed work between eight (8) to sixteen (16) hours on per day implying that some fuel attendants work over 60 hours a week which is against ILO standardized working hours of 48 hours per week. Employees who work overtime are expected to get some overtime bonuses but the survey revealed that most OMCs do not pay overtime bonuses to these workers. It must be noted that some few OMCs that fully own and operate their filling stations pay between Ghc1500 and Ghc2000 per month with bonuses of Ghc200 per month.
The lack of decent salaries by some OMCs to their employees is seen to be affecting their performance in the industry.
CEMSE’s review of the OMC performance report in the last three years has observed that OMCs that pay their employees well, thus between Ghc1500 and Ghc2000 per month are contracting the market shares of OMCs that do not pay their employees well.
The latter’s market performance is observed to be dwindling because some of their employees engage in unfriendly market practices that drive away consumers, and this is so because of lower salaries received monthly to survive in a highly cost inflated Accra.
Another reason for poor performance of low wage paying OMCs is because of lack of attraction of experienced and honest fuel attendants.
Some of the dealers interviewed at these low wage paying OMCs argued that they are not able to pay their workers well because of lower Dealer’s margin which ranges between 12 pesewas to 30 pesewas and lower sales volumes being experienced at their outlets.
Lower sales with lower margins amidst higher localized expenditure such as property rates, operating permits, signage fees, water and electricity and sanitation cost affects their ability to pay their workers well.
Aside, they always pay the products in cash so when prices change it affects their operations and ability to recover certain costs.
Based on these challenges and effects, CEMSE outlines the following recommendations:OMCs must increase the dealer’s margin and develop a compensation (emolument framework) for all their dealers, and enforce compliance of the new compensation framework.
This will improve the welfare of fuel attendants within the petroleum downstream.
OMCs must adapt cost-efficient business models that makes them very competitive with their fuel pricing in the industry in order to increase their sales volumes.
Increasing sales volumes increases revenue which could have a positive effect on employee welfare.
The petroleum downstream value chain has dealers at the petroleum product retail and for that matter the National Petroleum Authority must develop an institutional framework that protects the business interest of Dealers and their employees.