Eighty oil firms in Angola quit over rising prices

Nov 08, 2004 01:00 AM

About 80 of the 84 companies officially registered in Burundi to import and market petroleum products locally have ceased operations due to increasing oil prices on the world market and the government’s unwillingness to adjust prices upward.
The oil firms have in their own way shared their sorrows with motorists by withholding the small existing oil stocks, specially in Bujumbura where all gas stations were closed to the public. But they asked the media to urge the authorities to revise upwards the prices of petroleum products based on existing realities on the world market.

Though the price of a barrel of crude oil recently reached $ 55, the Burundi government has done very little to adjust prices of petroleum products locally, argued Charles Nikobasa, chair of the Burundi association of oil companies. Nikobasa also criticised the idea of the state to levy taxes on oil products, which, he said, puts a strain on the profit margins of the oil business.
In addition, there are bank fees forthe opening of letters of credit and a flat-rate tax levy that all wholesalers and retailers must pay before taking delivery of any oil products, he said.

The wholesaler must pay a 33-FB tax to the state (1 dollar = 1,050 FB) on every imported litre of oil, while the retailer has to pay 8 FB per litre upon the delivery of the product at gas stations, he explained. Besides, the wholesalers and retailers` profit margins have always been given in local currency on a flat-rate basis over many years while the Burundi franc keeps plummeting, Nikobasa said.
Generally, oil firms are even apprehensive about the rocketing of the dollar exchange rate and the oil import prices, which swells turnovers and maintain profits in a stable condition. The last gasoline price increase in 2004 was from 880 FB to 1,000 FB and from 720 FB to 1,050 FB for fuel oil... much to the distress of motorists.

Source: AngolaPress
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