IES Pushes Back on Calls to Remove NPA Fuel Price Floor
By: Maame Efua Kwaduah
The Institute for Energy Security (IES) has pushed back strongly against calls to scrap the National Petroleum Authority’s (NPA) fuel price floor, insisting that the policy remains essential to safeguarding competition in Ghana’s downstream petroleum market, even as fuel prices continue to decline.
The intervention comes at a time when falling global oil prices and relative stability of the cedi have led to successive reductions in fuel prices at the pumps in recent weeks. Some Oil Marketing Companies (OMCs), including StarOil Ghana, have argued that the price floor limits their ability to pass on deeper price cuts to consumers.
IES, however, maintains that the price floor was never designed to fix prices but rather to prevent predatory pricing practices that could undermine competition and drive smaller OMCs out of the market. The Institute notes that Ghana’s downstream petroleum sector is capital-intensive, high-risk, and highly exposed to global price volatility and exchange rate movements, making regulatory safeguards necessary.
“It is noteworthy that several industry players, including GOIL Ghana, have publicly challenged StarOil’s claims. The Group CEO of GOIL rightly noted that some companies advocating for lower prices are unable to compete even at the approved floor price of GHS 9.80 per litre in the current pricing window. This divergence between industry realities and public-facing narratives underscores the danger of oversimplifying fuel pricing dynamics for social media appeal,” part of the statement read.
The energy policy think tank has also questioned claims that petrol could be sold at prices as low as GH¢9.50 per litre during off-peak night hours. According to IES, fuel retail costs such as storage, financing, distribution, and inventory management remain constant regardless of the time of day, raising concerns about the sustainability of such pricing claims.
IES warns that unregulated price competition, particularly by dominant market players, could result in market concentration, supply disruptions and higher fuel prices over the long term. The Institute cites international experiences where aggressive price wars in fuel markets have ultimately harmed consumers.
The Institute has further highlighted that some industry players have challenged claims that fuel can be sold profitably below the approved price floor, pointing to inconsistencies between public narratives and market realities.
In light of the ongoing debate, IES has called on the NPA to investigate the pricing claims made by StarOil, assess compliance with existing petroleum pricing regulations and reaffirm the rationale behind the price floor regime in order to ensure market stability and sustainable consumer protection.
IES reiterated its commitment to policies that promote fair competition, energy security and long-term consumer welfare in Ghana’s downstream petroleum sector.
