Ghana’s downstream petroleum regulator, the National Petroleum Authority (NPA), has rejected calls for the removal of the Fuel Price Floor Policy , introduced a few years ago, insisting that the policy remains necessary due to persistent unfair pricing practices in the downstream petroleum sector.
According to the regulator, the market conditions that necessitated the introduction of the price floor have not changed.
It argues that pricing distortions continue to threaten industry stability.
The Director of Economic Regulation and Planning at the NPA, Abass Tasunti, revealed the Authority’s position in an interview with Accra-based JoyNews Channel.
He said the regulator remains cautious about any decision that could destabilise the sector, noting that the NPA is mindful of the industry it regulates and does not intend to take steps that could plunge it into crisis.
Mr Tasunti also stressed that the petroleum industry is closely linked to the financial sector, making it critical for regulators to tread carefully when implementing or removing policies.
“Looking at the current developments in the market, the National Petroleum Authority has no plans to remove this policy,” he stated.
The NPA’s position follows calls by the Chief Executive Officer of Star Oil Ghana, Kwame Tieku, and some civil society groups for the removal of the fuel price floor.
Star Oil CEO, Philip Kwame Tieku, has argued that scrapping the policy would allow fuel prices to fall further, given current market conditions.
He maintains that consumers are being denied the opportunity to enjoy lower fuel prices at the pumps because of the policy.
Currently, petrol is sold between GH¢9.99 per litre and GH¢11.68 per litre, while diesel sells between GH¢10.68 per litre and GH¢11.98 per litre.
Supporting the regulator’s decision to maintain the fuel price floor, the Industry Coordinator and Chief Executive Officer of the Association of Oil Marketing Companies (COMAC), Dr Riverson Oppong, explained that the decision to introduce the fuel price floor was not taken in isolation by the regulator, but followed consultations with industry players.
The aim, he said, was to curb destructive price undercutting that could compromise fuel quality and harm consumers in the long run.
Ghana currently has more than 200 oil marketing companies operating in the downstream sector, creating intense competition that can sometimes become unhealthy.
“Competition for survival becomes a problem when companies begin selling products at any price just to stay in business,” he explained on Accra-based JoyNews Channel.
“We have seen periods in this country where some players sold fuel at arbitrary prices simply to survive.
“As a consumer, would you be happy if someone brings a product below the acceptable price just to sell, even if the quality is questionable?”
Dr Oppong emphasised that the fuel price floor is not designed around profit margins for oil marketing companies, but rather serves as a minimum benchmark.
“The floor price does not include the margins of oil marketing companies. It is simply the ex-refinery price plus taxes and levies,” he clarified.
“Operational costs and dealer margins are not factored into that floor price.”
He noted that some large oil marketing companies are able to sell fuel at relatively lower prices due to economies of scale and operational efficiency.
“For example, a company like Star Oil, which is one of the leading oil marketing companies in terms of volume, has the capacity to sell at competitive prices because of its volume advantage and operational efficiency,” he said.
“They are able to make up margins through scale.”
Dr Oppong added that no company is currently selling fuel at the floor price itself.
“As of today, no one is selling at the floor price itself. All companies are selling above it,” he stated.
He disclosed that further engagements are underway with the NPA to review the current framework and strike a balance between affordability, quality, and industry sustainability.
“We are starting negotiations and discussions with the NPA this week to come to a better conclusion on the way forward,” he said.
“At the end of the day, we are here for consumers, to ensure both quality and value for money.”
In a statement reacting to calls for the removal of the policy, the Institute for Energy Security (IES) noted that the price floor plays several critical roles, including preventing predatory pricing by dominant firms, protecting smaller and emerging oil marketing companies (OMCs), and ensuring a healthy and competitive market.
The IES said the policy helps to “guarantee supply continuity, particularly during periods of tight margins or market stress,” while also promoting “long-term consumer welfare, rather than short-term price reductions that could lead to market concentration and higher prices in the future.”
Drawing on international examples, the Institute warned that unregulated fuel price wars often end badly for consumers.
“International experiences show that unregulated price wars in fuel markets often lead to monopolisation, supply disruptions, and ultimately higher consumer prices,” it said.
The IES also raised concerns about suggestions that fuel could be sold at lower prices during specific hours, such as overnight.
“The suggestion that an individual OMC could selectively reduce prices during specific hours raises serious regulatory and competition concerns,” the statement said, explaining that fuel retailing does not become cheaper at night.
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