Tax evasion, sales underreporting, substandard petroleum products imminent in Ghana’s downstream Petroleum sector -CSOs allege
Tax evasion, sales underreporting, substandard petroleum products imminent in Ghana’s downstream Petroleum sector -CSOs allege
Some Civil Society Organisations (CSOs) operating in Ghana’s energy sector have alleged that regulatory lapses in the country’s downstream petroleum sector have occasioned tax evasion, sales underreporting, and the distribution of substandard petroleum products.
According to the group, some companies that have not lifted petroleum from depots for years still have their indicative prices published by the National Petroleum Authority (NPA), suggesting potential illegal operations.
A joint statement issued by the Centre for Environmental Management and Sustainable Energy (CEMSE) and the Institute for Energy Policies and Research (ITEPR), pointed out that the unrestricted number of Petroleum Service Providers (PSPs) in the downstream sector, coupled with weak oversight, has led to market distortions.
“In 2024, it was observed that some Oil Marketing Companies (OMCs) did not lift products from any of the depots, yet they had their indicative prices published by the NPA. These companies might be selling poor-quality products to petroleum users since the source of their products is unknown,” the statement said.
Another major issue raised by the group is the presence of politically connected companies obtaining OMC licenses without meeting operational requirements.
The CSOs claim these politically connected entities divert petroleum products and evade taxes, depriving institutions like the Ghana Revenue Authority (GRA) and the Bulk Oil Storage and Transportation Company (BOST) of vital revenue.
The groups have, therefore, proposed several reforms calling for the elimination of the credit system to improve liquidity for petroleum procurement and suggested that new OMC applicants be required to provide proof of GH¢10 million in funds from a reputable bank.
In addition, they recommended increasing the minimum station requirement for an OMC license from seven to ten to ensure only serious players operate in the sector.
“There should be punitive actions taken against the board of directors if they approve a company that does not meet this requirement,” the statement added.
The CSOs have thus urged authorities to revoke the licenses of OMCs and BDCs that have not lifted or imported petroleum products in the past five years.
“These recommendations are to stop companies sponsored by politicians who see the petroleum downstream as an avenue to get easy money at the expense of ordinary consumers.
These companies, who do not own a single station, when given a license to trade as OMCs, sell the petroleum products and do not pay taxes to GRA—keeping the margins and levies meant for NPA and BOST,” they stated.
The CSOs concluded by calling on the new management and board of the NPA to act decisively to safeguard the downstream petroleum sector from further instability.
