Accra: The Chamber of Oil Marketing Companies (COMAC) has staunchly defended the National Petroleum Authority's (NPA) price floor policy, asserting its necessity for protecting the downstream petroleum industry from illegal activities and predatory pricing. Mr. Gabriel Kumi, Chairperson of COMAC, emphasized the critical role of the policy in ensuring the sector's survival, despite the recent suspension of membership by Star Oil Limited.
According to Ghana News Agency, Mr. Kumi clarified that the Petroleum Price Floor Programme is not designed to hamper competition but to stabilize a market increasingly threatened by illicit fuel trade and unregulated products. This development follows Star Oil's withdrawal from the Chamber, which stemmed from disagreements over the policy and concerns regarding fair representation of its views.
The NPA introduced the Petroleum Price Floor Programme in April 2024 as an amendment to the 2024 Petroleum Products Pricing Guidelines. Mr. Kumi highlighted how illegal petroleum products sold at significantly low prices have disrupted the market, disadvantaging businesses that comply with tax and regulatory obligations. He stressed the importance of strict enforcement by the regulator to address industry challenges, stating that curbing these illegalities could resolve approximately 80 percent of the industry's issues.
Mr. Kumi elaborated on COMAC's democratic nature, noting that decisions, including support for the price floor policy, are made through majority votes at the board level. He mentioned that there were no objections from Star Oil during the meeting where the policy was discussed. Despite Star Oil's concerns about the policy's future implications, Mr. Kumi argued that the prevailing industry conditions necessitate its continuation.
Acknowledging the heated discussions within the Chamber and the extension of competition to social media, Mr. Kumi described Star Oil's membership suspension as a temporary disagreement rather than a division within the Chamber. A high-level team has been formed to engage with Star Oil's leadership to resolve the matter and restore its membership. Mr. Kumi underscored the importance of Star Oil, noting its status as the number one player in the industry and the Vice Chair of the Chamber, expressing a strong desire to retain such a key member.