Asec Urges Urgent Reform In Ghana's Petroleum Downstream Amid Star Oil's Withdrawal From COMAC
The Africa Sustainable Energy Centre (ASEC) expresses deep concern over the institutional crisis in Ghana's petroleum downstream sector following Star Oil Limited's indefinite suspension of membership from the Chamber of Oil Marketing Companies (COMAC). This move by the nation's leading indigenous Oil Marketing Company (OMC) highlights a profound misalignment between efficient market leaders and the protective policies of COMAC and the National Petroleum Authority (NPA), particularly the contentious price floor mechanism.
Star Oil, which rose from 13th place in 2020 to the top OMC in 2025, announced its withdrawal on Wednesday, January 21, 2026, citing unfair representation and a failure to advocate for consumer-friendly policies. As Ghana's market leader with a 14% share, annual sales of 819 million litres, 254 filling stations, and fiscal contributions of GHS 2.63 billion in taxes and levies equivalent to 7% of the IMF bailout, Star Oil's decision accentuates systemic issues in the sector. ASEC views this schism as a pivotal moment for advancing a just energy transition in Africa, emphasising equity, innovation, and consumer welfare.
The suspension signals a breakdown in collective bargaining. Star Oil's advocacy for abolishing the price floor aligns with principles of market liberalisation, allowing efficient firms to pass savings from international price drops and forex gains directly to consumers. The current policy, intended as a temporary safeguard against predatory pricing, has become a barrier to competition, penalising high-volume operators like Star Oil while protecting inefficient models where components include landed costs, taxes, levies, and a minimum operational margin.
ASEC supports Star Oil's position, noting that the successful removal of price floors for Bulk Distribution Companies (BDCs) did not lead to market collapse. This inconsistency distorts deregulation efforts initiated in 2015, stifling the transmission of global efficiencies to Ghanaian pumps.
Star Oil's move is rooted in representational integrity. As COMAC's largest financial contributor, the company expected its pro-consumer views to be fairly articulated. However, COMAC's leadership has portrayed Star Oil's stance as anti-competitive, damaging its reputation. ASEC believes trade associations must accommodate divergent views to maintain authority; otherwise, they risk becoming shields for inefficiency.
In an era of rising living costs, Star Oil has positioned itself as a consumer advocate, proposing innovations like night-time discounts.
Implications for COMAC and the Sector
Star Oil's exit poses severe challenges for COMAC, including financial shortfalls that could limit research, advocacy, and operations, potentially triggering further resignations. It erodes industry consensus, weakening lobbying power with the NPA and government. Public perception now casts COMAC as a "protective cartel," prioritising margins over public welfare.
ASEC critiques the NPA and Institute for Energy Security (IES) defence of the floor, which warns of predatory pricing and supply disruptions. However, Star Oil's scale enables sustainable low margins without cross-subsidisation. Ghana's overcrowded market of over 200 OMCs could benefit from consolidation to 50 efficient firms, improving oversight and reducing costs.
Recommendations for Reform
To resolve this impasse, ASEC proposes:
COMAC Governance Overhaul: Implement weighted communication protocols, an independent research wing, and consumer advocacy integration to ensure balanced representation.
Phased Price Floor Withdrawal: Replace with a Competition Monitoring Framework using data analytics to detect true predation, including "Cost-to-Serve" audits for OMCs.
Technological Integration: Enable dynamic pricing models powered by AI and digital tools to support time-of-use discounts.
