Shell, dealers at cross-road

Story: Boahene Asamoah

RETAILERS of Shell products in the Accra-Tema area have appealed to the management of Shell Ghana Ltd. to extend the deadline for the termination of their dealership agreement.
According to the retailers, the December deadline set for them was too short as they would not be able to close their books.
The retailers made it clear that they had made huge capital investments in their respective businesses, and that some of them had commitments with their bankers which could not be redeemed within the stated period.
Shell Ghana Limited, in a letter to its dealers dated October 12, 2007, requested dealers to fill out an application form in respect of its new Operating Platform Change (OPC) which comes into effect on January 1, 2008.
This follows a deadlock meeting held at the head office of Shell in Accra in which management of the multi-national oil giant refused to back down on its demands for dealers to apply for a new retailer business agreement contract by the end of the year, or it would not renew its contract with the dealers.
The letters further asked the dealers to fill out the application forms and submit them by the end of October 19, 2008
In an interview, the Chairperson of the Ghana Shell Retailers Association, Ms Esther Mullings, said much as members of the association agreed to the management of Shell’s decision to switch to a new retailer agreement, the timing was too short for members to fully comply and to round off their business.
She said the new contract had also not be fully discussed with dealers and that efforts made by the dealers to get management of Shell to discuss the details of the new contract had fallen on death ears.
The members, clad in red attire, went to the Shell Head Office in an attempt to persuade management of the company to extend the deadline for the renewal of the dealership agreement to about six months to enable the members to comply.
Ms Mullings stated that information gathered indicated that the management of Shell intended to operate a cluster system where one dealer would be in charge of about three filling stations.
She said the association also intended to boycott the sale of the V-Power petrol, which was recently introduced by the company to put pressure on the management of the company to negotiate with them.
Ms Mullings said employees engaged by members could not be discharged so abruptly, while some of them had made credit commitments, particularly to industrial customers with whom they had agreements which could not be determined within the stipulated time.
“Outstanding debts owed by the afore-mentioned debtors will also require some time to recover,” she stated.
A letter from Shell Ghana Limited dated October 19, 2007 to the association, through its lawyers, stated that “Shell Ghana Limited is not terminating the contract of any of her dealers. Shell Ghana Limited will simply not renew the existing agreements when they expire.”
Some members of the association alleged that OPC would seek to reduce margins, increase the rent charges and disadvantage the dealers.