The Chamber of Petroleum Consumers (COPEC) is urging the National Petroleum Authority (NPA) to adopt a hands-off approach and allow market forces to dictate fuel prices, just as the nation gears up for the second petroleum pricing window of March, which officially opens on Monday, March 16.
Duncan Amoah, Executive Secretary of COPEC, cautioned that heavy-handed regulatory involvement in setting price floors sends premature signals to the market, often prompting oil marketing companies (OMCs) to hike prices in anticipation of official adjustments.
His comments come in response to the NPA’s recent revision of price floors for the upcoming window. Effective March 16, the base price for petrol has been raised to GHȼ11.57 per litre, up from GHȼ10.46 during the first half of the month. Diesel has seen a steeper climb to GHȼ14.35 per litre from GHȼ11.42, while Liquefied Petroleum Gas (LPG) now has a floor of GHȼ10.67 per kilogramme, compared to GHȼ9.38 previously.
These adjustments translate to increases of GHȼ1.11 for petrol, GHȼ2.93 for diesel, and GHȼ1.29 for LPG within a single month.
Appearing on Channel One’s Newsroom on Sunday, Mr. Amoah argued that competition among fuel stations is a more effective mechanism for regulating prices than the imposition of price floors by the regulator.
“I don’t think that the NPA should bother itself with setting price floors,” Mr. Amoah stated. “Prices are going up, and the OMCs will not sell at a loss, the same as the BDCs. Setting the floor price at this time will only send the signal to the market that prices are going to rise in the next few days, and that is why some of them couldn’t wait for Monday. I think the NPA should rest and allow the market to evolve.”
Mr. Amoah highlighted that competition within the downstream petroleum sector is already serving as a natural check on price surges. He noted that while some stations might have been expected to sell as high as GHȼ16, market dynamics are likely to temper those figures.
“Competition has equally controlled prices. So, tomorrow, stations that could have done about GHȼ16—the indication I am getting is that they may come down to a maximum of GHȼ15. So, there is some competition effect. It will be right if the NPA allows the market to simply evolve without the tightening and controls,” he added.
The upcoming pricing window will determine fuel costs for the remainder of March, as OMCs balance global petroleum market trends against the NPA’s newly established benchmarks.
