The Chamber of Petroleum Consumers (COPEC) has renewed its call on the National Petroleum Authority (NPA) to review its fuel price floor mechanism, arguing that it prevents consumers from fully benefiting when global petroleum prices decline.
Speaking in an interview on Saturday, July 25, COPEC Executive Secretary Duncan Amoah said the current pricing system allows oil marketing companies to raise pump prices when international market conditions worsen but restricts competition when prices should be falling.
“That pricing floor mechanism is not helping the Ghanaian in any way,” Amoah said.
He explained that Ghana’s downstream petroleum sector operates under a fully deregulated system, where fuel prices are expected to reflect movements in international oil prices and exchange rates.
“What that means is that when you deregulate a market, the forces of demand and supply would determine prices,” he said.
According to Amoah, the current pricing window has seen diesel prices increase by nearly 70 pesewas per litre, while petrol prices have risen by about 30 pesewas due to changes in global 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 he acknowledged that price increases are a normal feature of a deregulated market, Amoah argued that the price floor undermines competition when international fuel prices fall.
“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 maintained that removing or reviewing the price floor would allow consumers to benefit more quickly from falling global fuel prices while encouraging stronger price competition among oil marketing companies.
