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Ghanas emerging oil industry is creating, as anticipated, new economic opportunities. Morevehicles are expected to be imported into the country, which reasonably means increased demandfor petroleum products.

This, perhaps, informs the growing investment in fuel retail stations.

The upstream oil industry is barely 10 months old, but there is a proliferation of petroleum retailoutlets and fuel service stations across the country.

Downstream market activities of supplying products, including bitumen and lubricants, haveover the years been handled by the oil marketing companies.

The deregulation policy of the petroleum sector has however attracted indigenous entrepreneursand other individual entrants.

With increasing interest in storage, distribution and sales, there appears to be good prospects forinvestors; fuel distribution has become an attraction for many people.

For instance, not less than 15 fuel stations are sited on the 27 km Kumasi-Offinso Road in theAshanti region. New stations are also being established in the city centers.

This is exciting development, thats according to Nana Yaw Owusu, who chairs the GhanaNational Chamber of Commerce and Industry in the Ashanti Region.

Its going to increase our economy so much, giving employment to a whole lot of people andeven the areas where these stations are being located it opens up businesses and so on. So thereare a whole lot of benefits that were going to derive, he observed.

Some industry players, however, caution the rush into this area of investment.

The springing up of these petroleum stations has been too phenomenal and doesnt augur wellfor the industry, says Daniel Owusu-Appiah, who has 25 years experience in petroleum retail,and he has researched into franchising in the business in Ghana.

According to him, there is a high correlation between economic growth and growth forpetroleum and gas.

But he observes that failure of local investors to engage competent hands to undertake effectivecost-benefit analysis could be costly.

At every point just about 1km you find a filling station springing up and you know this industry basically is based on location; where you dont have a very good location and youre not able tomake sales up to about a minimum of GH 100,000.00, youll lose because the margins are verylittle, Mr. Owusu -Appiah stated, taking into cognizance the cost of utilities, staff salaries andother incidentals.

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The National Petroleum Authority (NPA) encourages the establishment of fuel outlets to easedistribution of products. The authority guides prospective investors to set up and operate fueloutlets.

Northern Zonal Manager, Samuel Asare Bediako, says more people are applying to set up such

stations.

He says over 60 applications have been rec eived from people who want to set up filling stationsor service stations or LPG filling plants. So yes we expect more of such investments to come in.

Despite his fears, Mr. Appiah shares the view of Nana Yaw Owusu that the Ghanaian economywill eventually benefit from the fuel retail business.

He acknowledged that where there is competition, its good for the consumer. So right now wehave what we call price differentials some of the oil marketing companies have gone to theextent of reducing the pric es which is good for the consumer.

Mr. Appiah believes the rise in fuel consumption pattern is an added advantage for people toengage themselves in this business [of petroleum retailing].

Demand for petroleum products in Ghana is expected to continue to grow due mainly to thesurge in fuel for transportation, households, manufacturing, primary processing and the serviceindustries.

As the vehicular population in Ghana grows, nothing would perhaps stop the investing publicfrom venturing into petroleum retailing. Credit joyfmonline