Star Oil’s exit from COMAC driven by minority position on price floor – Chairman

The Chairman of the Chamber of Oil Marketing Companies (COMAC) has clarified that Star Oil’s decision to suspend its membership was not the result of marginalisation, but stemmed from the company’s minority stance on a major industry policy.

Speaking on Joy News’ PM Express, Business Edition on Thursday, COMAC Chairman Gabriel Kumi explained that the Chamber adhered strictly to its established decision-making framework regarding the petroleum price floor.

“Star Oil is a very key member of the Chamber,” he said.

His remarks come in response to Star Oil’s announcement that it had indefinitely suspended its membership from COMAC, citing dissatisfaction with how the Association managed discussions surrounding the fuel price floor.

According to Mr Kumi, Star Oil itself acknowledged the decision-making principle that guides the Chamber.

“I’m happy in the letter that Star Oil wrote to us, it did admit that it respects the view of the majority,” he said.

While noting that differing opinions are valued within COMAC, he emphasised that minority views cannot supersede collective resolutions.

“We also respect the view of the minority, but at the end of the day, the majority decision carries the day,” he said.

Mr Kumi further explained that the fuel price floor policy originated from within the Chamber, rather than being imposed externally.

“This floor pricing issue, the idea was pushed forward by the Chamber about two years ago with the National Petroleum Authority, and it was accepted,” he said.

He acknowledged that the policy has encountered implementation challenges.

“Along the line, there have been challenges with the policy,” he said.

Those challenges, he noted, triggered concerns among some members.

“And I think that is what got our member to express those things,” he said.

Mr Kumi said these objections eventually culminated in Star Oil’s decision to step away from the Chamber.

“Unfortunately, those expressions find their way in them, saying that they want to be suspended from the Chamber,” he said.

Despite the situation, he said COMAC respects Star Oil’s choice to suspend its membership.

“We respect that decision of Star Oil,” he said, adding that the Chamber’s position remains unchanged.

“At the end of the day, the majority decision is that, as it stands, the floor pricing policy is good for the industry,” he said.

He stressed that the policy plays a protective role within the sector.

“It protects the industry and is the way to go,” he said.

Mr Kumi also dismissed suggestions that larger oil marketing companies wield disproportionate influence within COMAC.

“At the Chamber level, at the board level, everybody has one vote,” he said.

He emphasised that company size does not affect voting power.

“No matter how big you are, you still have one vote,” he said.

He explained that policies can only advance with majority backing.

“If it wasn’t the majority decision, we couldn’t push it,” he said.

According to him, proposals that lack broad support are set aside.

“There are a lot of decisions that we have discussed, but if we find that it’s not popular, we shelve it,” he said.

He concluded by noting that the fuel price floor continues to enjoy widespread support among members.

“This one was a popular majority decision, and it’s still the popular decision amongst the Chamber members,” he said.

Source: Joy News