Star Oil suspends COMAC membership amid price floor dispute

Star Oil Limited has announced the immediate suspension of its membership of the Chamber of Oil Marketing Companies (COMAC), a decision that has intensified tensions within Ghana’s downstream petroleum sector and sparked concerns about unity within the industry body.

In a statement issued on Wednesday, January 21, the oil marketing firm described the move as an indefinite suspension, stressing that it was taken after careful consideration.

Star Oil noted that it has been a long-standing and active member of COMAC, and remains its largest financial contributor, having consistently supported the Chamber’s operations and advocacy work.

The company explained that its membership of COMAC had been premised on the expectation of fair representation of members’ interests and the accommodation of differing but constructive views on policy and regulatory issues. However, Star Oil said recent developments had undermined this principle, prompting it to reassess its continued association with the Chamber.

At the heart of the disagreement is COMAC’s public stance on the petroleum price floor, a contentious regulatory issue within the industry.

Star Oil disclosed that it has consistently called for the abolition of the price floor, a position that differs from the majority view held by COMAC’s membership.

The company expressed dissatisfaction that its perspective has not been fairly acknowledged or adequately explained, particularly during recent media engagements by the Chamber’s Chief Executive.

According to Star Oil, the lack of balanced communication has fuelled negative public perceptions, creating the impression that its position is driven by anti-competitive or improper motives.

The company described such insinuations as unjust and damaging to its corporate reputation, especially given its long-standing contributions to the industry.

Reiterating its position, Star Oil said its opposition to the price floor is based on sound economic and market principles, arguing that the policy distorts pricing by preventing the prompt transmission of international fuel prices and foreign exchange movements into the local market.

It maintained that this ultimately weakens competition and disadvantages consumers, noting that similar arguments had previously informed the removal of the price floor for Bulk Distribution Companies.

“In light of the above, Star Oil believes that continued membership of COMAC under the current circumstances exposes the company to reputational risk without providing a fair platform for its views to be represented,” the statement said.

“We have therefore decided to suspend our membership until the Chamber demonstrates a clear commitment to balanced representation and fair communication of divergent positions among its members.”

JoyOnline