Gov’t, BDCs talk fuel price relief behind closed doors
By Nii Trebi Hammond
The government is holding discreet discussions with Bulk Distribution Companies (BDCs) to negotiate a reduction in their supplier’s premium, a move aimed at cushioning Ghanaians from the full impact of the recently enacted GHS1 per litre energy sector levy on fuel.
National Petroleum Authority (NPA) Chief Executive Officer, Godwin Edudzi Tamakloe, revealed this behind-the-scenes engagement in an interview, highlighting the government’s strategy to prevent a sharp increase in fuel prices at the pumps.
The supplier’s premium is a crucial component of the fuel price build-up, representing a markup applied by BDCs on imported petroleum products before they are sold to Oil Marketing Companies (OMCs). Mr. Tamakloe explained that persuading BDCs to trim this premium could effectively lead to a price reduction, thereby mitigating the new levy’s burden on consumers.
“If you look at the pricing, there’s something maybe you’ve not averted your mind to. The OMCs are buying the product from the BDCs. Now, when the BDCs also bring their imported product, they have what they call their supplier’s premium,” Mr. Tamakloe said.
He added: “The supplier’s premium that the BDCs sell the product with is another matter we are also having that conversation quietly with them about, so that if the supplier’s premium can be watered down a bit, it will also impact all the others. So, we are having that conversation you may not be aware of, but we are having it quietly. In fact, we are working behind the scenes to mitigate what the OMCs are doing.”
The NPA boss acknowledged that the new GHS1 energy sector levy, while necessary to address the nation’s energy sector debt, inevitably adds pressure to final fuel prices. He underscored the need to cushion Ghanaians, given the complex chain influencing fuel pricing—where BDCs’ premiums, OMCs’ operating costs, taxes, and levies all contribute to the pump price. By encouraging BDCs to lower their margins, the NPA believes the levy’s net impact can be absorbed more equitably across the entire value chain, rather than being passed solely to consumers.
