The Chamber of Oil Marketing Companies (COMAC) has defended the National Petroleum Authority’s (NPA) petroleum price floor policy, describing it as a critical measure to protect the downstream petroleum industry from illegal practices and predatory pricing.
The Chairperson of COMAC, Mr Gabriel Kumi, said the Chamber remained firmly supportive of the policy, despite the recent suspension of membership by Star Oil Limited, a leading indigenous oil marketing company.
In an interview, Mr Kumi said the majority of industry players believed the price floor policy was necessary to ensure the survival and stability of the sector.
“The price floor is not meant to stifle competition. It is a deliberate intervention to sanitise a market that is increasingly being threatened by illegal products and illicit fuel trading,” he said.
Star Oil Limited, which served as Vice Chair of the Chamber, announced its withdrawal from COMAC amid disagreements over the policy and concerns about inadequate representation of its views. The decision followed weeks of tension within the downstream petroleum industry.
The NPA introduced the Petroleum Price Floor Programme in April 2024 as part of amendments to the 2024 Petroleum Products Pricing Guidelines.
Mr Kumi explained that the policy was introduced to curb the sale of unregulated “third-party” petroleum products, which are often sold at extremely low prices, creating an uneven playing field for compliant companies that meet tax and regulatory obligations.
“The problem is not the policy itself but how it is being enforced. Once you set a floor below which no company should sell, we expect the regulator to strictly enforce it,” he said.
He urged the NPA to intensify monitoring and enforcement activities to eliminate illegal fuel products from the market, noting that doing so would resolve the bulk of challenges confronting the industry.
Mr Kumi stressed that COMAC operated as a democratic body where each member, regardless of size or market share, had one vote.
He said the Chamber’s support for the price floor policy was a decision taken by majority vote at the board level.
“At the end of the day, we go by the majority view. At the board meeting where the decision was taken, I do not recall any objection from Star Oil,” he said.
He acknowledged that some members, including Star Oil, might be concerned about future implications of the policy, but maintained that prevailing market conditions justified its continuation.
Mr Kumi also admitted that disagreements over the policy had generated heated exchanges within the boardroom and on social media, contributing to Star Oil’s decision to suspend its membership. However, he dismissed suggestions that the Chamber was deeply divided.
“This is a temporary disagreement among players. The industry is not split,” he said.
He disclosed that a high-level team had been constituted to engage the leadership of Star Oil in an effort to resolve outstanding issues and encourage the company to rejoin the Chamber.
“We have responded to their letter in a very cordial manner. Star Oil is not an ordinary member; it is the number one player in the industry and our Vice Chair. Naturally, we would not want to lose such a member,” Mr Kumi added.
