The Executive Director of the Institute for Energy Policies and Research (INSTEPR), Mr. Kojo Poku has stated that deregulation in the downstream sector has not been helpful.
He said the actual role the deregulation is to play has not been seen and petroleum prices have been increasing unilaterally without any competition in the sector.
“The issues of Ghanaians being at the mercy of external force is that we thought deregulation of the downstream market will come to help the average Ghanaian. Because there will be reduction and with competition, prices will come down.
“We’ve come to realize that for the past years since the introduction of deregulation, it has not helped Ghanaians. People are unilaterally increasing prices and everybody is following suit. There isn’t any competition in sector.”
Kojo Poku
He disclosed that some stakeholders have pleaded with the ministry to have a look at the deregulation; because “those are things that the average Ghanaian is not benefiting from.” also
“So, the Minister has promised us that he is committed to looking at the deregulation of the downstream sector.”
Kojo Poku
Government will not regulate market
The Executive Director further averred that the fact that they are calling for deregulation to be looked at doesn’t insinuate that government shall regulate the market. He explained that the call is for the laws and regulations to be looked at.
“The fact that we want deregulation looked at well and made to work for the Ghanaian doesn’t mean that alternative to deregulation is government coming back to subsidize. We have other parts of the world that have a very efficient deregulated system where government doesn’t play any role in terms of deregulation. All that some of us are saying is that, the laws and the regulation in place for deregulation is not working so it needs to be revisited. Nobody wants an era of government subsidies and an era of government controlling the market.”
Kojo Poku
He was of the view that no government is interested in becoming a regulator since it brings them no benefit. This, he posits, is a situation which had been agreed upon to be left for the private players.
Touching on the involvement of stakeholders in ensuring issue of margin prices are tackled, he said It should be a much wider deliberation. He indicated that technocrats and Civil societies coming together will enable a wider consultation and this helps bring about an effective policy.
“Yesterday’s meeting, like I said, was called by COPEC and we attended. But in terms of deliberation and rethinking of the deregulation should be a much wider consultation. In Ghana, I think the energy sector has the most Civil Society Organizations and the proper consultation between all these organizations to relook at the policy, I think the input from various CSOs will help shape a better deregulation.”
Kojo Poku
OMCs don’t impose taxes
Mr. Poku however clarified the fact that an oil marketing company selling the fuel doesn’t mean they impose taxes. He explained that the taxes are passed on from the Bulk Distribution Companies to the Oil Marketing Companies. The Executive Director disclosed that stakeholders were also pleading for the reduction of petroleum prices.
“It’s a deregulated that market so you cannot compromise. So, that’s the clarification that needs to be made. The more prices are high, it creates smuggling by third parties and other people not paying the taxes.”
Kojo Poku
