The Chamber of Petroleum Consumers (COPEC) has warned that introducing price floors in a deregulated petroleum market without also setting price ceilings can be counterproductive and may distort the market.
In an interview on Saturday, January 24, COPEC Executive Secretary Duncan Amoah explained that regulatory interventions like price floors, if not balanced with other measures, can hinder market efficiency and restrict oil marketing companies from adjusting to changing market conditions.
He emphasized that in a properly functioning deregulated market, prices should be determined naturally by competition, costs, and consumer demand.
“If you talk of a deregulated market, you would expect the market to evolve. Any attempt to intervene by way of setting floors without considering the ceiling, to me, is anarchist. You simply allow others to sell at any rate they want, and in fact, I have used the big three in the past.
“There were windows that, and per our checks with average BDC prices, taxes, margins, sometimes their prices were overshot by GHS 0.50 to GHS 1. So if you need to define a floor, define a ceiling also so that they can play within,” he said.
Meanwhile, COPEC has called on the NPA to remove price floors set out in the 2024 petroleum products pricing guidelines.
According to COPEC, the policy, which prevents Petroleum Service Providers (PSPs) from selling below the regulator-set minimum, is outdated and counterproductive in a deregulated downstream petroleum market.
Amoah, in an earlier interview said the price floor does not benefit consumers and argued that scrapping it could allow oil marketing companies (OMCs) to reduce fuel prices further when market conditions permit.
