The Chamber of Oil Marketing Companies (COMAC) has expressed its appreciation for the Government of Ghana's recent directive to reduce petroleum product prices, acknowledging the intervention as necessary to provide relief to Ghanaian consumers.

However, the chamber has raised significant concerns regarding the financial burden the reduction places on industry players, which has not been sufficiently addressed by the government.

In a statement issued on Friday, April 17, COMAC clarified that while the government has introduced price reductions for consumers, it has not absorbed the associated costs as claimed by some sources.

Instead, the relief has been provided through cuts to the operational and regulatory margins that compensate industry participants for vital downstream services.

These margins include the Primary Distribution Margin (PDM), BOST Margin, Fuel Marking Margin (FMM), and Unified Petroleum Pricing Fund (UPPF), which cover essential functions such as fuel distribution, infrastructure maintenance, product tracking, and price stabilisation.

"The Government has maintained all statutory taxes and levies on petroleum products in full," said COMAC in its statement.

"Relief to consumers has instead come from reductions in the operational margins that industry players rely on to maintain operations."

These reductions directly impact the revenue streams of oil marketing companies (OMCs) and pose significant challenges to their financial stability.

During the intervention period, OMCs have been required to pre-finance a shortfall of 63 pesewas per litre of diesel sold before reimbursement.

For instance, a company distributing 10 million litres of diesel per month would need to advance an additional GH¢6.3 million to cover the shortfall of 63 pesewas per litre.

The reimbursement process, however, typically takes between 45 and 60 days, leaving companies to bear the financial burden for an extended period without covering capital costs.

"Reimbursements do not cover capital costs, resulting in significant liquidity challenges for industry participants," COMAC explained.

Moreover, the situation is exacerbated by the need for companies to pre-finance distribution costs and meet statutory tax payment deadlines before receiving any reimbursement.

This "double financing burden" further weakens liquidity and increases the regulatory risk for companies, making it harder for them to sustain operations effectively.

While COMAC has expressed its support for the government's intervention to ease the rising cost of fuel, it has also emphasised the vital role played by industry participants in sustaining the nationwide fuel supply despite the financial strain.

"Industry participants are incurring significant costs by absorbing reduced margins and pre-financing operations," the statement read. "The significance of this contribution must not be understated or disregarded."

To alleviate the ongoing financial pressures, COMAC has made two key recommendations. Firstly, the chamber has called on the National Petroleum Authority (NPA) to "urgently reduce the current 45–60 day timeline for reimbursement," which would help ease the working capital pressures on companies and ensure that the fuel supply remains stable.

Secondly, COMAC has requested the government to temporarily suspend or defer statutory tax and levy payments to the Ghana Revenue Authority (GRA) during this period of intervention.

This would help reduce the "double financing burden" carried by companies, providing them with some financial relief.

"COMAC remains committed to transparent and constructive engagement between the Government and all stakeholders," the statement said. "We aim to ensure that consumer interventions remain effective and financially viable for the sector."