COMAC defends NPA petroleum price floor policy

The Chamber of Oil Marketing Companies (COMAC) has defended the National Petroleum Authority’s (NPA) price floor policy, describing it as necessary to protect the downstream petroleum industry from illegal activities and predatory pricing.

Gabriel Kumi, Chairperson of COMAC, said that despite the recent suspension of Star Oil Limited’s membership, most industry players remain resolute that the price floor policy is critical to the sector’s survival.

Speaking in an interview monitored by the Ghana News Agency, Kumi explained that the Petroleum Price Floor Programme was not intended to stifle competition but to sanitise a market increasingly threatened by illicit fuel trade and unregulated products.

The development follows Star Oil’s withdrawal from the Chamber, citing disagreements over the policy and concerns about 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.

Kumi said the presence of illegal petroleum products in the market, often sold at extremely low prices, had created an uneven playing field for compliant businesses that meet tax and regulatory obligations.

“The reason we have this policy is because of some illegalities—illegal products that have found their way into the market,” he said.

He noted that strict enforcement of the policy by the regulator would significantly address the challenges confronting the industry.

“If you have set a floor that no company should sell below, then we expect our regulator to adhere strictly to it. Once those illegalities are checked, about 80 percent of the industry’s problems will be solved,” Kumi said.

Kumi stated that COMAC operates as a democratic institution, with decisions taken by majority vote at the board level.

He said the decision to support the price floor policy was a majority position and that he did not recall any objection from Star Oil at the meeting where the matter was discussed.

“At the end of the day, as a democratic institution, we always go by the majority view,” he said.

Kumi added that while Star Oil may have raised concerns about the future implications of the policy, prevailing industry conditions required its continuation.

He acknowledged that discussions within the Chamber had been heated and that competition had spilled onto social media, leading to the suspension of Star Oil’s membership.

However, he dismissed reports of divisions within the Chamber, describing the situation as a temporary disagreement.

Kumi said a high-level team had been constituted to engage Star Oil’s leadership to resolve the matter and restore its membership.

“We have responded to their letter. It was a very cordial response. Star is not an ordinary member; it is the number one player in the industry and the Vice Chair of the Chamber. Naturally, we wouldn’t want to lose such a member,” he said.

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