Civil society organisations in the energy sector are sounding the alarm over Ghana’s downstream petroleum industry, cautioning that the market could collapse without immediate policy reforms.
The Centre for Environmental Management and Sustainable Energy (CEMSE) and the Institute for Energy Policies and Research (ITEPR) have highlighted a fragile industry plagued by high credit risks, poor debt management, and lax regulatory enforcement.
In a joint statement signed by Benjamin Nsiah of CEMSE and Kwadwo Poku of ITEPR, the CSOs pointed out that the surge in market players over recent years has not translated into greater efficiency. Since deregulation, the number of Bulk Distribution Companies has jumped from 31 in 2015 to 53 in 2024, while Oil Marketing Companies have increased from 139 to over 200 in the same period. Yet, despite these impressive numbers, average annual petroleum sales per Oil Marketing Company have remained stubbornly stagnant at around 24,990 metric tonnes.
This disparity is stark when compared internationally, with Ghana now hosting more Oil Marketing Companies than Kenya or Tanzania, even though all three countries see roughly 5 million tonnes of annual sales. The situation is further compounded by weak regulatory oversight, which has led to underreported sales volumes, tax evasion, and the circulation of substandard petroleum products. There have been instances where companies, not even lifting products from depots, have had their prices published by the National Petroleum Authority—raising serious concerns about the quality and origin of the fuel reaching consumers.
Adding to the challenges, politically connected companies are reportedly exploiting the system to secure licences without the necessary physical infrastructure. This abuse allows them to divert petroleum products and evade taxes, ultimately robbing state agencies like the Ghana Revenue Authority and the Bulk Oil Storage and Transportation Company of vital revenue.
In response, the CSOs are calling for sweeping regulatory changes aimed at bolstering the financial sustainability of the petroleum value chain. They advocate for the eradication of the problematic credit system and improvements in liquidity for product procurement—steps they believe are essential to avert a potential crisis in the sector.
This warning serves as a critical reminder that numbers alone do not ensure industry health. With the current trajectory, the onus is on policymakers to act swiftly and decisively, implementing reforms that not only address existing vulnerabilities but also safeguard the market from future shocks.
