The Chamber of Petroleum Consumers (COPEC) has renewed its call for the National Petroleum Authority (NPA) to review its fuel price floor mechanism, arguing that it prevents consumers from benefiting fully when global petroleum prices decline.
Speaking on The Big Issue on Channel One TV on Saturday, COPEC Executive Secretary Duncan Amoah said the current pricing regime allows oil marketing companies to increase pump prices during a pricing window when international market conditions worsen, but effectively limits competition when prices should fall.
“That pricing floor mechanism is not helping the Ghanaian in any way,” Amoah said.
He explained that Ghana’s downstream petroleum market is fully deregulated, allowing prices to respond to international oil prices and exchange rate movements.
“What that means is that when you deregulate a market, the forces of demand and supply would determine prices,” he said.
Amoah noted that during the current pricing window, diesel prices had risen by about 70 pesewas per litre, while petrol prices had increased by roughly 30 pesewas, reflecting changes in international market conditions.
“For diesel, we have recorded almost 68, 70 pesewas additional. Petrol has also seen about 30 pesewas from the GH¢13.70-something that it used to be to above GH¢14 now,” he said.
While acknowledging that upward price adjustments are an expected feature of a deregulated market, Mr Amoah argued that the price floor distorts competition whenever international prices move in the opposite direction.
“The markets can go up within the window. They can go up by as much as one Cedi or two cedis if the world market prices dictate so,” he said.
“But if it were the inverse where it has to go down, you have published a floor that says it is the barest minimum below which nobody should sell.”
He said removing or reviewing the mechanism would allow consumers to benefit more quickly from declines in global fuel prices and encourage greater price competition among oil marketing companies.
Amoah has previously advocated reforms to Ghana’s fuel pricing framework, maintaining that while deregulation protects the government from subsidising fuel, market rules should also enable consumers to enjoy the full benefits of falling international prices.
