Oil Marketing Companies Collapsing


Black Marketing Of Petroleum Products To Blame

The Non-Performing Loans (NPLs) of commercial banks, is likely to worsen if government fails to stop the illegal trade in the petroleum downstream sector.

According to the Association of Oil Marketing Companies (AOMCs), the development, has made it difficult for their members to repay debts due to the low sales.

AOMC represent companies such as Total Ghana, Goil, Shell, Fraga Oil, Havilah, Nasona, Star Oil, Puma, Telenergy, Allied Oil, Engen, Excel, Glory Oil and others.

The AOMC, is an industry association and a private initiative by the oil marketing operators in Ghana. It is an advocacy institution established to help direct downstream policy, legislation and regulation and pursue research towards the development of the downstream sector.

It represents the collective interests of the companies involved in the oil marketing and petroleum products in Ghana, coordinating with the major Stakeholders in the Industry which include: Ministry of Petroleum, Ministry of Finance & Economic Planning, Bank of Ghana, National Petroleum Authority (NPA), The Energy Commission, Environmental Protection Agency (EPA), Tema Oil Refinery (TOR), Revenue Agencies Governing Board (RAGB), Ghana Standard Board, Ghana Fire Service, Customs Exercise and Preventive Service (CEPS), Internal Revenue Service (IRS) and Bulk Oil Storage and Transportation Co. Ltd (BOST).

The caution by the OMCs, follows the surge in the illegal sale of petroleum products by unregulated businesses.

“It’s a very dire situation in that if this one continues we will not be able to service our debt obligation as we ought to because we rely on this sale of fuel to generate our revenue. So if the revenue is not forth coming it remains difficult to determine where you could get money to service your debt on a monthly basis,” the CEO of the AOMCs, Kwaku Agyeman Duah told Citi FM after his press conference this week.

Already, the NPLs of banks, have increased by about 36 percent as at February, this year.

Some banks, have also cited the huge debt burden in the energy sector, as reasons for their non performance in recent years.

Mr. Agyeman-Duah, further cautioned that the banks would be compelled to shy away from granting credit in order to avert the huge losses.

“It’s a chain reaction to affected banks, the non-performing loans of the banks will also be higher and if we don’t take care we will have our banks recoiling to their old selves as they used to be,” he observed.

The unbridled activities carried out by the illegal traders, have made the genuine businesses uncompetitive.

This is largely due to the fact that the products of the genuine companies, have been rendered uncompetitive as their products are relatively expensive compared to the illegal ones.

The OMCs, have also threatened job layoffs, which is likely to affect about 4000 employees in the sector.

They have since appealed to the Presidency to intervene, after a two day ultimatum to get their concerns addressed.

Last Tuesday, AOMCs organized a press conference on illegal sale (black marketing) of petroleum products addressed by the Industry Coordinator (CEO) of the Association, Kwaku Agyemang-Duah.

He issued a statement as follows;

Ladies and Gentlemen of the media, good morning. On behalf of the Chairman of the Governing Board of the AOMCs and all the CEOs of the Oil Marketing Companies (OMCs) and LPG Marketing Companies present, I welcome you to this press conference and would like to express our profound thanks and gratitude for responding to our invitation especially after the May day celebration.

We have invited you here, as our important stakeholders, to bring to your attention and that of every Ghanaian, some illegal practices that have been going on in our industry, where some individuals and entities are allowed to rob the nation of colossal sums of money through tax evasion. These unregulated activities which destroy legitimate businesses, cause unwarranted job losses and pose serious safety concerns and threat to national security.

Since 2016, our market has been inundated with black marketing (illegal sale) of petroleum products, in huge quantities, in a manner that is beyond imagination. This menace began as an imperceptible black marketing activity in early 2016, rising gradually to the latter part of the year but seemingly subsided after the 2016 elections, only to “resurrect” beyond comparable measure from February, 2017.

Ladies and gentlemen, these nefarious activities take the following forms:

  1. Illegal Diversion of Export Products to the Domestic Market: This is where products supposedly meant for export to the landlocked countries such as Mali and Burkina Faso, which attract very little tax, are diverted and sold on the local market to the consumers at relatively cheap prices compared with those sold by legitimate operators like the OMCs whose prices contain full blown taxes/levies.

The failure of the institutions to stop this has led to the recent soaring interest by entities in acquiring export licenses.

2.   Illegal Discharging or Dumping of Petroleum Products on the market from uncustomed vessels/boats: This is a situation where petroleum products are brought into the country through our designated ports at odd/regular times and/or through unapproved waters along the coastline and dumped on the local market by vessels (ships)/boats without going through the customs procedures and without paying the statutory taxes and levies.

These irresponsible individuals and entities also bypass the requisite quality assurance checks by the Ghana Standards Authority, thereby openly dump low quality fuel on the market.

They discharge these products into tankers at the ports, without them being arrested by the security agencies and the regulatory authorities, notwithstanding the fact that the ports and the various depots have significant presence of institutions which have been mandated to check such malfeasance.

3.   Illegal Diversion of Non-Taxed Industrial Products for Sale as Petrol: This is the practice where industrial products, specifically naphtha and condensate, which do not attract taxes/levies, are diverted and sold as petrol, at prices lower than the regular petrol which attracts all the taxes and levies. This act not only robs the state of huge taxes but also destroys the businesses of genuine operators.

4.   Dangerous practice of Tanker-to-Tanker Transfer of these Illegal Products: The prevalence of the illegal sale of products has led to the emergence of tanker yards where people are engaged in the dangerous practice of transferring highly flammable petroleum products from one tanker to the other, with the potential to cause fire disasters whose consequences are unimaginable. Yet, this is being allowed to continue with impunity, in the national capital where all the heads of the various institutions that can stop this menace are present.

  5.   The Dangerous Practice of Selling These Illegal Products in Unauthorized Places such as Lorry Stations, “table-tops” and Galamsey Sites: These illegal products are now being sold in some parts of the country in gallons in some lorry stations, on “table-tops” and some “galamsey” sites, posing serious danger to lives and property.


  1. LOOMING REVENUE LOSS OF OVER 1BILLION GHANA CEDIS THIS YEAR: Last year, the state lost nominal tax/levies revenue of about Ghc850Million as a result of a huge drop in the sale of legitimate petroleum products by OMCs by about 9%, when it ought to have rather increased by at least 3%. It is estimated that if this issue is not stopped now and the trend continues, government will be losing over Ghc1Billion by the end of this year. We have indeed witnessed a volume drop by 19% in February, 2017. This is VERY VERY ALARMING!!!!!!!

This will definitely affect government’s ability to meet its revenue projections. Therefore, the citizen will be denied the required basic amenities and infrastructure as a result of the activities of a few nation wreckers. In fact, this amount alone, can significantly fund government’s Free SHS Programme.

2. THREAT TO NATIONAL SECURITY: The activities of these criminals is a major threat to national security as these criminals are creating a parallel industry, with the potential to fund illegal activities and produce destabilizing agents to destroy the peace and stability of Ghana. Therefore, we must act with dispatch before they develop to a level akin to the “galamsey” headache the nation is currently grappling with. In fact, with time, and as Ghana is now an oil producing country, they can even develop into sophisticated and powerful criminal gangs with the capacity to divert a whole vessel of fuel, as happens in other countries. We are indeed sitting on a time bomb!!!

3.  LOOMING DANGER OR NATIONAL CATASTROPHE: Given the fact that these people engage in unregulated loading and discharge of highly flammable petroleum products at depots and tanker yards without following standard operating procedures, if this is not stopped immediately, we should prepare for looming danger or national catastrophe and the National Security and the Regulators should be prepared to answer for the death of innocent citizens should the unfortunate happen.

4.  COLLAPSE OF GENUINE OPERATORS LEADING TO SERIOUS LOSS OF JOBS: Currently, our members who are genuine operators, who have invested so much in constructing fuel stations and continue to work hard to pay huge taxes/levies to the state and also employ a large number of Ghana’s workforce, are left to suffer as their sales volumes dwindle, making them struggle to pay their debts to the banks. Some have begun folding up and laying off staff. If this continues, many more operators will fold up and many more people will be laid off, adding to the already existing precarious unemployment situation in the country. Information reaching our Secretariat indicates that about 4,000 direct job workers will be laid off by the end of this month. If this situation is not immediately arrested, we should be expecting this number to rise significantly to include the indirect jobs due to the multiplying effect in the chain.


This practice will seriously undermine the efforts being made to ensure that the consumer gets quality petroleum products by eroding the gains made so far in the fight against the dumping of dirty fuel on our market. This is because this illegal cheap products with high Sulphur content and other adulterants will flood the market and make OMCs unable to sell their high quality products with low Sulphur content.


With the declining volumes and margins due to the prevalence of these illicit products, most OMCs are finding it difficult to service the loans they have taken from the banks. This unfortunate trend will eventually lead to rising non-performing loans which will threaten the survival of some banks.


Currently, our members are struggling to pay the petroleum taxes/levies because the prevalence of these illicit products aggravates the selling of stocks early enough to be able to pay the petroleum taxes/levies within the stipulated period. Therefore, some are compelled to borrow at about 33% to pay Ghana Revenue Authority, else they are stopped from operating, whilst those engaged in illicit practices and not paying a pesewa to the state and are allowed to operate with impunity. Thus, in effect, we are killing our businesses by pre-financing government as we try to be law-abiding. But this certainly cannot continue. Therefore, if this issue is not addressed, the government should expect high rate of default by OMCs this year.


As a result of some dissonance on the current deregulation regime, the price war amongst OMCs are really hurting some OMCs. While efforts are being made to correct them, the presence of illegal products exacerbates the price war and inevitably leads to the sudden demise of some OMCs.


Ladies and gentlemen of the media, as a law abiding body which respects state institutions, the Association has over the period written to, consulted with, had dialogue and deliberations with the National Petroleum Authority (NPA) and the relevant agencies and Ministries on this menace on countless occasions. Whilst these relevant bodies keep assuring us they are working on addressing the issues, these unscrupulous people keep escalating their activities on daily basis in broad day light with impunity, in a manner that defies logic and destroys the legitimate businesses of our members. We have just begun the 2nd day of the second month of the 2nd quarter of 2017 and we still do not know when this menace will be curtailed or rooted. Every passing day, not having requisite results mean that the nation continues to lose and OMCs gradually will be ebbing away, causing massive job losses as well as making the state lose huge revenue and posing serious danger to the safety and security of Ghanaians.

To this end, and given the gravity of the situation, we are giving the government 48 hours to bring this menace to an end. We firmly believe that the government has the requisite authority, tools, instruments and relevant resources such as security institutions to “stamp out” this menace within this period. We also believe that our regulators, security operatives and the governmental agencies know the culprits and that they should act without fear or ill-will.

Our members are equally willing, determined and ready to collaborate with the government in this endeavor and this would be the best Private Public Partnership (PPP) legacy we expect our government to leave for the business community as well as the people of Ghana.

We are very confident that the President, H.E. Nana Addo Dankwa Akufo-Addo, will intervene to get all the bona fide agencies and institutions involved to deploy the full might of their mandate to bring this to an end once and for all.

Long live Ghana, long live the downstream petroleum industry for indigenous Ghanaians.

Once again, thank you all for coming.




2nd May, 2017

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