The Chamber of Petroleum Consumers (COPEC) has strongly criticised the National Petroleum Authority’s (NPA) decision to increase price floors for petroleum products in the first pricing window of February, arguing that the move works against consumer interest in a deregulated downstream petroleum market.
According to COPEC, the upward adjustment has come at a time when many Oil Marketing Companies (OMCs) are already reviewing pump prices, placing additional financial pressure on consumers who were hoping market competition would help moderate fuel prices.
Speaking in an interview, COPEC’s Executive Secretary, Duncan Amoah, said the regulator’s decision does not benefit consumers and instead limits the ability of competitive OMCs to offer lower prices at the pumps.
“As of this morning, one of the major companies, GOIL, clearly is selling on the floor that the NPA has set,” Mr Amoah said, noting that under normal circumstances, some companies would have priced below that level to attract customers.
He explained that the new price floor effectively blocks such competitive behaviour, forcing all OMCs to sell petrol products at or above a minimum price determined by the regulator.
“So the consumer is being told that even though some of the oil marketing companies would have sold to you a little cheaper, the NPA has set a blanket floor that you should not be sold petrol products to.
“It’s counterproductive to the consumer interest.”
Duncan Amoah, COPEC’s Executive Secretary
Deregulation Under Question
Mr Amoah questioned the consistency of the NPA’s approach, arguing that the existence of a price floor contradicts the principles of deregulation that govern Ghana’s downstream petroleum sector.
“You cannot deregulate and, on the other hand, seek to insist that, as for selling below a certain price, I will not allow you but when you sell above it, that’s okay.”
Duncan Amoah, COPEC’s Executive Secretary
He added that the absence of a price ceiling, combined with the enforcement of a price floor, distorts the market and limits the benefits consumers should enjoy under a competitive pricing regime.
COPEC further argued that the price floor policy risks protecting inefficient players in the petroleum marketing space at the expense of both consumers and more efficient operators.
“The NPA cannot become the protector of oil marketing companies, over 229 of them, some of which have decided to be efficient.”
Duncan Amoah, COPEC’s Executive Secretary
He suggested that less efficient firms should not be shielded from market forces simply because they are unable to compete on pricing.
“Others have decided to also go for their own profit. I don’t think that the NPA should be defending anybody at this point in a deregulated environment. It defeats the consumer interest largely.”
Duncan Amoah, COPEC’s Executive Secretary
Details of the New Price Floors
For the first pricing window of February, the NPA has set the price floor for petrol at GH¢9.99 per litre, up from GH¢9.80 in the previous window. This represents an increase of about 1.94 per cent.
Diesel has seen a sharper adjustment, with the price floor rising from GH¢10.47 to GH¢10.95 per litre, translating into an increase of approximately 4.58 per cent.
The new thresholds mean that OMCs selling below these levels during the second pricing window of January must now raise their pump prices to comply with the directive.
Industry observers note that the introduction of higher price floors effectively curtails the price wars that have characterised parts of the downstream market in recent months.
Several OMCs had been offering discounted prices to gain market share, a strategy that often benefited consumers directly.
With the new price floors in place, such companies will be compelled to adjust prices upward, potentially narrowing price differences across fuel stations nationwide.
Market analysts say this could reduce consumer choice and weaken one of the core advantages of deregulation: competition-driven efficiency.
As debate over the NPA’s role intensifies, the coming weeks are likely to reveal whether the regulator will maintain its current stance or respond to growing pressure from consumer advocacy groups and market stakeholders.
READ ALSO: Global Tailwinds Supercharge Ghana’s Economic Reset
