The Petroleum downstream sector is facing an imminent collapse due to lack of effective regulations and unsustainable business practices.
Based on this Civil Society Organizations (CSOs) in the energy sector, are calling for urgent reforms to address the challenges facing the industry.
The CSOs, led by Kwadwo Poku, Executive Director of the Institute for Energy Policies & Research (ITEPR), and Benjamin Nsiah, Executive Director of the Center for Environmental Management and Sustainable Energy (CEMSE), have identified several key issues that need to be addressed.
These include the proliferation of Petroleum Service Providers (PSPs), inadequate regulatory enforcement, and unsustainable business practices.
According to the CSOs, the number of PSPs, including Bulk Distribution Companies (BDCs) and Oil Marketing Companies (OMCs), has increased significantly over the past decade.
However, this growth has not translated into improved efficiency or sustainability in the industry.
Instead, it has led to a lack of transparency, tax evasion, and poor quality products.
The CSOs noted that the deregulation of the petroleum downstream sector in 2015 led to an increase in the number of PSPs.
However, this has resulted in a volatile system where consumers are paying high prices for petroleum products due to bad credit and debt management practices.
To address these challenges, the CSOs are recommending several reforms.
These include introducing regulations to improve the financial sustainability of the petroleum value chain, increasing the minimum number of stations required for an OMC license, and revoking the licenses of OMCs and BDCs that have not been operational over the past five years.
The CSOs are also calling for stricter enforcement of regulations and punitive actions against PSPs that do not comply with industry standards.
They believe that these reforms are necessary to prevent the collapse of the petroleum downstream sector and ensure that consumers have access to high-quality petroleum products at affordable prices.
The call for reforms comes at a time when Ghana’s petroleum downstream sector is facing significant challenges.
The sector is characterized by a lack of transparency, tax evasion, and poor quality products. If left unchecked, these challenges could have serious consequences for the economy and consumers.
The CSOs are urging the NDC government to take immediate action to address these challenges and ensure the sustainability of the petroleum downstream sector.
They believe that with effective regulations and sustainable business practices, the sector can be transformed to benefit consumers and the economy as a whole.