Chief Executive Officer of Star Oil Ghana, Philip Tieku, has revealed how rampant tax evasion and fuel product diversion are undermining fair competition and distorting prices in Ghana’s petroleum downstream sector.
Speaking on JoyNews’ PM Express Business Edition on Thursday, November 6, Mr. Tieku said these illegal activities have rendered current regulatory interventions including the introduction of a price floor largely ineffective.
“When the price floor was instituted, I openly wrote against it,” he stated.
“I don’t really believe that in a competitive market there’s any need for a price floor or even a price ceiling. You want players to be able to operate their businesses efficiently.”
According to him, the decision to introduce a price floor signals weak governance structures in the industry and a tendency to protect poorly managed companies.
“It’s almost an admission that some players make bad pricing decisions or that the system cannot ensure fairness without interference,” he said.
Mr. Tieku maintained that market forces, not artificial controls, should determine fuel prices, arguing that competition fosters efficiency and innovation.
However, he conceded that a price floor could be justified only when tax evasion or product diversion creates abnormal market conditions.
“About a week ago, there was a GRA report on products meant for export being diverted and sold locally,” he explained.
“When people evade taxes, they can afford to sell fuel much cheaper to clear it quickly.”
He noted that fuel taxes alone amount to roughly ¢4.27 per litre of gasoline, offering significant illicit profit margins for those who divert untaxed products into the local market.
“If someone diverts a product meant for export to Burkina Faso and sells it locally, they already have a ¢4.27 advantage. They can drop prices to ridiculous levels, and that disrupts the market,” he said.
Mr. Tieku added that while the price floor may temporarily prevent such underpricing, it offers no long-term benefit to the sector.
“That’s the only scenario where I see the price floor being useful. Beyond that, it has no real value,” he maintained.
Responding to claims that the policy protects smaller Oil Marketing Companies (OMCs) from collapse, the Star Oil boss disagreed.
“If the regulator argues that way, then it’s an admission that many industry players don’t understand their business or can’t analyze costs, revenues, and profitability,” he argued.
“The Bank of Ghana doesn’t license clueless banks — it ensures proper governance and control. The same should apply here.”
Mr. Tieku emphasized that sound corporate governance and financial discipline, not artificial price controls, are the keys to a stable and competitive downstream market.
“When the price floor was introduced, nobody could say Star Oil wasn’t profitable. We were not selling at a loss,” he said confidently.
He concluded by urging authorities to clean up the petroleum downstream sector, eliminate tax evasion, smuggling, and weak enforcement, and create an environment where fair competition and consumer protection can thrive.
