Brace for fuel hike next week or risk shortage if war persists – COMAC CEO

By Kingsley Webora TANKEH

The Chief Executive Officer-Chamber of Oil Marketing Companies (COMAC), Dr. Riverson Oppong, has hinted at imminent hoarding of petroleum products by oil marketing companies (OMC) to take advantage of the next pricing window, in which he said fuel prices are set for a hike to about GH?15 a litre due to the war between Israel and Iran.

The country faces a growing risk of fuel supply uncertainty amid escalating tensions between Israel and Iran, which have sent shockwaves across global oil markets.

Speaking exclusively to the Business and Financial Times, Dr. Oppong said Ghana is low on reserves – which makes the situation even more precarious, as even prices at the pumps in this current window are uncertain.

Even though the Ghanaian market reacts slowly to global developments – like we are seeing play out in the Middle East – he said this time it may be different, considering the hike’s magnitude and the country’s inadequate fuel reserves.

“This means that next week two things might happen. We might have prices going up just a bit to reflect the hike, which has now finally dawned on us; or we see big OMCs hoarding products waiting for the next window when prices go up,” he explained.

According to an earlier release from COMAC, Ghana spends over US$400million monthly on fuel imports. This is due to lack of a strategic fuel reserves system, infrastructure limitations and inefficiencies across the supply chain and distribution.

It said this overdependence on imports and low reserves exposes the country to the brunt of any global oil price shake-up.

“Obviously, landing prices of crude oil products from next week – or even the later part of this week – will surely change,” Dr. Oppong noted.

“I do not think the fuel reserves we always have in Ghana can take us up to two weeks before they are depleted. We need to restore as we speak.  Day in and day out, we have vessels discharging in our waters,” he said, stressing that if the war-induced global price hike persists, it might reflect at the pumps anytime soon.

To avoid such situations in future, he advocated establishing a fuel buffer stock to improve the country’s reserves.

“It is high time government became cautious and took steadfast steps to make sure the national buffer stock is enacted and activated at the earliest,” he added.

Dr. Oppong believes this will help cushion the country against vagaries of geopolitical tensions and other external factors which have the potential of disrupting both the price and supply of oil products in Ghana.

COMAC has urged government to revive Tema Oil Refinery (TOR) to restore local refining capacity and ensure the effective operation and proper resourcing of Bulk Oil Storage and Transportation (BOST) to enhance the fuel supply chain, national strategic reserves and storage capacity.

Government should ensure there is adequate foreign exchange reserves for petroleum imports to ensure stability in the fuel supply chain, a portion of the statement read.

Global oil prices have been rising since the Israel-Iran war started on June 13. According to Reuters, brent crude oil price jumped 13 percent to an intraday high of US$78.50 a barrel and later dropped to US$74.23 on the same day – which is still 7 percent higher than the previous day. However, it has since increased to sell at US$76.48 a barrel as of June 18.

Experts have warned that if the war persists for at least two weeks, fuel prices might hike significantly to reverse the gains chalked up so far in the local market due to a strengthened cedi… which resulted in a reduction of prices at the pumps.

For the June 16, 2025 pricing window, petrol price is expected to drop by up to 2.2 percent, diesel by 4.3 percent and LPG by 3.2 percent. According to COMAC, some Oil Marketing Companies (OMCs) have already started reducing prices at the pumps.

However, this slight fuel price relief may be short-lived.

COMAC earlier  threatened a 9 percent hike in fuel prices if government’s D-Levy were to be implemented on the June 16 proposed date, which prompted a u-turn just two days to the implementation date.

The Minister of Energy and Green Transition subsequently announced an indefinite halt in implementation of the Energy Sector Levies (amendment) Act, 2025 – popularly known as ‘Dumsor Levy’ (D-Levy), which according to government was to generate GH?5.7billion to offset the mounting energy sector debt.

This followed a directive from the president, who expressed concern over ramifications of war in the Middle East.

However, Dr. Oppong is advising government to scrap the subsidy on marine gas oil (MGO) – which he said does not serve its purpose of making fishing affordable to improve the livelihoods of those in the fishing value chain and ensure more affordable fish for consumers.

He said these fuels find their way back into the market, which defeats the subsidy’s purpose.

He said phasing out subsidies on untaxed petroleum products like MGO could save an estimated GH?431million annually.

“We are advocating that the heavily subsidised fuel, marine gas oil, needs to be taken a second look at. Should you take that away, government can generate some revenue to pay off the energy sector debt,” he noted.

He expressed concern over under-taxation of the said fuel, which he said could be a more viable additional source of revenue to offset the mounting energy sector debt – together with proceeds from the proposed GH?1 levy on every litre of fuel purchased, which has now been halted.

“We realised that only GH?0.20 was added to MGO. To be fair, government must consider removing the subsidy so it can be sold at the full price, like any other gas fuel, allowing the state to generate some revenue from it,” he said.

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