The Chamber of Petroleum Consumers (COPEC) has renewed calls for the National Petroleum Authority (NPA) to review the fuel price floor mechanism, arguing that the system 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 arrangement allows fuel prices to rise when international market conditions become unfavourable but limits competition when prices should reduce.
“That pricing floor mechanism is not helping the Ghanaian in any way,” Mr Amoah said.
He explained that Ghana’s downstream petroleum sector operates under a fully deregulated system, meaning fuel prices are expected to respond to changes in global 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.
Mr Amoah noted that during the current pricing window, diesel prices increased by about 70 pesewas per litre, while petrol prices went up by about 30 pesewas per litre due to movements in international market conditions.
He acknowledged that price increases are a normal feature of a deregulated petroleum market but argued that the existing price floor creates an imbalance when global prices begin to 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.”
According to COPEC, removing or reviewing the mechanism would allow consumers to enjoy quicker reductions in fuel prices whenever international petroleum prices decline and would also encourage stronger competition among oil marketing companies.
Mr Amoah has previously called for reforms in Ghana’s fuel pricing system, arguing that while deregulation reduces government’s burden of subsidising petroleum products, the market structure must also ensure consumers benefit from favourable price movements.
