Petrol price floor cut by 12%, diesel by 2.5% in latest NPA review

The price floor for petrol, diesel and liquefied petroleum gas (LPG) for the second pricing window of June has been reduced, reflecting favourable international market developments and changing market dynamics.

This is according to the latest release by the National Petroleum Authority (NPA).

The benchmark price floor for diesel has been set at GH¢15.11 per litre, down from GH¢15.49 per litre in the first pricing window of June, representing a decline of GH¢0.38 per litre or about 2.5%.

The price floor for petrol has seen the sharpest reduction, falling to GH¢13.39 per litre from GH¢15.20 per litre in the first pricing window.

This represents a decrease of GH¢1.81 per litre, equivalent to nearly 12%.

For LPG, the price floor has been reduced to GH¢13.23 per kilogram from GH¢13.48 per kilogram previously, a decline of GH¢0.25 per kilogram or about 1.9%.

The price floors represent the minimum benchmark prices at which Oil Marketing Companies (OMCs) and LPG Marketing Companies (LPGMCs) are expected to retail petroleum products during the second pricing window of June.

The NPA noted that all OMCs and LPGMCs are required to comply with the prescribed price floors in line with the Petroleum Product Pricing Guidelines (PPPG).

However, the regulator clarified that the benchmark prices exclude premiums charged by International Oil Trading Companies (IOTCs), the operating margins of Bulk Import, Distribution and Export Companies (BIDECs), as well as marketers’ and dealers’ margins.

These components will continue to be determined independently by the respective companies under the PPPG framework.

The latest downward adjustments come amid a review of government fuel relief measures introduced to cushion consumers and businesses from fuel price increases triggered by tensions in the Middle East.

Under the revised intervention, the government has withdrawn the GH¢0.36 per litre support on petrol, while the GH¢2.00 per litre support on diesel has been reduced to GH¢1.07 per litre.

The revised support measures took effect at the start of the second pricing window of May.

The government has indicated that the revised relief measures will remain in force for two pricing windows, subject to further review based on prevailing market conditions.

The reduction in fuel price floors is expected to provide some relief to transport operators, manufacturers and other fuel-dependent businesses, while helping to moderate operational costs across key sectors of the economy.