By: Franklin ASARE-DONKOH
Some Civil Society Organisations (CSOs) operating in Ghana’s energy sector have revealed that the country’s downstream petroleum space is facing imminent risk of collapse unless urgent policy reforms are implemented.
The groups explained that Ghana’s transition from a regulated to a partially deregulated petroleum market, particularly after the removal of fuel subsidies in 2015, has fostered competition; however, the policy has not led to efficiency.
According to the CSOs, partially deregulated has seen a rapid increase in the number of Petroleum Service Providers (PSPs), which has strained the sector.
In a joint statement issued by the Centre for Environmental Management and Sustainable Energy (CEMSE) and the Institute for Energy Policies and Research (ITEPR), petroleum products’ seeming stability and availability in the market hang on a volatile system.
“The Ghanaian consumer is paying for high credit and bad debt management in the current system,” it added.
The statement further stated that since the deregulation policy, Bulk Distribution Companies (BDCs) have grown from 31 in 2015 to 53 in 2024, while Oil Marketing Companies (OMCs) have surged from 139 to over 200.
It noted that despite the expansion, average annual petroleum sales per OMC have remained stagnant at approximately 24,990 metric tonnes, nearly unchanged since 2015.
“The license renewal fees for BDCs are about US$300,000 annually, and a new entrant pays more than US$750,000,” the CSOs noted.
Comparisons with Kenya and Tanzania further highlight inefficiencies in Ghana’s market structure. While Ghana has 213 OMCs, Kenya has 106, and Tanzania has just 60, despite all three countries recording similar annual petroleum sales of around 5 million tonnes.
