COMAC backs end to selective fuel discounts, calls it “correction of an error”

The Chamber of Oil Marketing Companies (COMAC), has defended a move by the National Petroleum Authority to scrap selective discounting at some retail fuel outlets across the country.

According to COMAC, the move should not be viewed as a “ban” but more as a restoration of rules that should have been consistently applied, especially in a market where the fight for share has pushed “aggressive pricing tactics.”

Speaking on Joy News’ PM Express on Wednesday, the Chief Executive of COMAC, Dr. Riverson Oppong, expressed that he found it “alarming” to hear some industry players mistake the directive simply as scrapping discounts, arguing instead that the NPA is “rectifying an error.”

“When I hear that NPA has scrapped discounting I find that a bit alarming. NPA has not scrapped discounting entirely, they have rectified an error which I believe is long overdue to be corrected,” he said.

The COMAN Chief Executive linked the decision to “what consumers go through,” asserting that drivers have been motivated to roam across town searching for “whichever station” is discounting on a given day. This, he said, is unfair and inefficient.

“Why should I have to drive 30 minutes, 40 minutes looking for Star Oil or a station that has a discount to buy from? That’s unfair, we are talking about fair prices, you are not going to be driving around the town looking for where a] discounted station is,” he added.

He pointed to the “existing price wars” between GOIL and market leader Star Oil, arguing that discounting has become a “competitive weapon” after earlier disagreements over fuel price floors.

“The next pricing window will be very interesting, wholesale pricing pressures can change rapidly especially for OMCs that cannot lock in supply terms,” he added.

Meanwhile, the NPA has explained that the decision to scrap selective discounts does not prevent companies from reducing prices but instead aims to stop selective reductions that can amount to “unfair price discrimination.”

“The NPA has observed that the selected discounting is rather being used as a tool to undertake predatory pricing. If an OMC has the ability to reduce its price, reduce it for all your consumers to enjoy that, I don’t think OMCs have clusters of consumers where these consumers should enjoy a discounted price and this other consumer should pay a higher price,” NPA’s Abbas Ibrahim Tasunti said.