Star Oil versus Goil: The price war beyond missile strikes in Middle East

Escalating geopolitical tensions in the Middle East, triggered by coordinated strikes by the United States and Israel on Iran in late February, have continued into March, affecting global energy markets.

Disruptions to shipping through the Strait of Hormuz have constrained supply and increased volatility in crude oil prices, with Brent crude briefly exceeding $100 per barrel. For import-dependent economies such as Ghana, the impacts were largely expected.

Ahead of the second pricing window of March, which began on March 16, projections by the Chamber of Oil Marketing Companies (COMAC) indicated significant increases in ex-pump prices, with petrol, diesel, and LPG expected to rise by 16.93 percent, 17.21 percent, and 11.26 percent respectively.

The anticipated hikes were primarily driven by surging global crude prices and supply constraints stemming from the Middle East crisis.

Accordingly, most Oil Marketing Companies (OMCs) adjusted pump prices upward at the start of the pricing window, reflecting prevailing market conditions. However, intensified competition among OMCs has partially cushioned the full impact for consumers, moderating the pace of price increases at the pumps.

Star Oil and GOIL trigger price war

Competition between Star Oil and GOIL intensified at the onset of the March 16 pricing window, prompting rapid price adjustments across key petroleum products.

State-owned GOIL initially maintained prices at the National Petroleum Authority’s price floor for the window, offering petrol at GH¢11.57 per litre and diesel at GH¢14.35. This positioned GOIL below Star Oil, which had adjusted prices upward in response to global oil market movements. Star Oil began the window with petrol at GH¢12.49 per litre, diesel at GH¢15.99 per litre, and RON 95 at GH¢13.59.

The pricing gap proved short-lived. By March 17, GOIL revised its prices, with petrol at GH¢12.40 per litre and diesel at GH¢15.69, while Super XP 95 remained at GH¢14.35.

In response, Star Oil lowered its prices the same day, reducing petrol to GH¢12.29 per litre and diesel to GH¢14.99, undercutting GOIL on the two most consumed products.

GOIL reacted within hours, adjusting petrol to GH¢12.28 per litre and diesel to GH¢14.98, slightly below Star Oil, while keeping Super XP 95 unchanged at GH¢14.35.

The pricing contest continued over subsequent days. On March 20, Star Oil trimmed petrol to GH¢12.25 per litre, maintaining a slight advantage over GOIL’s pricing. Diesel increased to GH¢15.79 per litre, above GOIL’s level, while RON 95 rose to GH¢14.25, still marginally below GOIL’s Super XP 95.

GOIL’s March 21 adjustments reflected a mixed strategy: petrol fell slightly to GH¢12.24 per litre to remain competitive, diesel increased to GH¢15.69 per litre, just below Star Oil’s diesel prices, and Super XP 95 remained unchanged.

This sequence highlights a dynamic and competitive pricing environment, with both firms actively responding to each other and market conditions.

Competitive pressure spreads across the market

In reaction to the price war between the leading companies, other OMCs adjusted their strategies. TotalEnergies and Shell kept petrol at GH¢13.29 per litre but reduced diesel from GH¢16.29 to GH¢15.89.

Petrosol held petrol steady at GH¢13.25 and reduced diesel from GH¢16.25 to GH¢15.98. These adjustments indicate a broader trend where OMCs balance margin preservation with competitiveness in a price-sensitive market.

Market share battle and regulatory constraints

GOIL’s pricing appears aimed at reclaiming market leadership through its network of over 400 outlets. Star Oil, which overtook GOIL in market share in early 2025, relies on competitive pricing to sustain its lead.

The rivalry intensified following enforcement of revised petroleum pricing guidelines mandating uniform pricing across outlets, eliminating targeted discounts previously used as a competitive tool.

Calls are increasing for a review of the price floor policy to give OMCs more flexibility to pass cost savings to consumers, though regulators insist the price floor prevents predatory pricing while remaining open to stakeholder discussions.

Currency pressures and consumer impact

Exchange rate movements continue to influence fuel prices. Bank of Ghana data shows the cedi depreciated against the US dollar by 4.6% in January, 2.2% in February, and 3.9% in March 2026, adding pressure on imported petroleum costs.

Within the March 16 pricing window, the cedi saw a marginal appreciation from GHS 11.049 to GHS 10.913 per dollar, a 1.25% gain, providing temporary relief. Maintaining cedi stability is critical to moderating global oil price shocks’ effects on domestic pump prices.

Policy options and long-term energy security

Rising fuel costs have revived discussions on potential government interventions, including temporary tax reliefs on petroleum products.

The sustainability of levies such as the GH¢1 fuel levy introduced under lower price regimes is being questioned in the current high-price environment.

Long-term, Ghana’s vulnerability to external shocks underscores the need for energy security. Expanding local refining through facilities like Tema Oil Refinery and Sentuo, and building strategic reserves via Bulk Oil Storage and Transportation (BOST), is crucial to reduce import dependence.

Until these structural gaps are addressed, Ghana’s downstream petroleum sector will remain sensitive to global geopolitical developments, with domestic price stability closely tied to events beyond its borders.