OMCs Free to Cut Prices Anytime – NPA
The National Petroleum Authority (NPA) says Oil Marketing Companies (OMCs) are free to reduce fuel prices at any time, stressing that Ghana’s downstream petroleum sector now operates under a fully competitive pricing regime.
According to Abass Ibrahim Tasunti, Director of Economic Regulation and Planning at the NPA, the current framework allows petroleum marketing companies to determine their own pump prices within the established pricing window whenever market conditions make reductions possible.
Speaking on the issue, Tasunti explained that the sector moved away from the earlier regulated pricing model in 2015 when government introduced a deregulated system to encourage market competition among fuel distributors.
The reform was backed by amendments to Legislative Instrument 222, which allows companies to independently determine their pump prices while ensuring compliance with certain regulatory conditions.
“In 2015, when we moved from regulated pricing to a system where oil marketing companies determine their prices independently, we started seeing stronger competition in the industry,” Tasunti said.
Uniform Pricing Across Company Networks
While companies are allowed to determine their own prices, the NPA official clarified that each OMC must maintain a uniform price across all its retail outlets nationwide.
This means that although prices may differ between competing companies, individual companies cannot charge different prices within their own network of filling stations.
“And so inasmuch as oil marketing companies determine their own prices and we have prices varying between companies, the company must maintain a uniform price across its outlets,” Tasunti explained.
The uniform pricing requirement exists largely because of the role played by the Unified Petroleum Price Fund (UPPF).
Role of the Unified Petroleum Price Fund
The UPPF is designed to equalise the cost of transporting petroleum products across the country. Under the scheme, the cost of moving fuel from depots to various retail outlets is covered by the fund rather than by individual marketing companies.
Tasunti said the arrangement ensures fairness for consumers regardless of where they live.
“For example, the consumer in Wa should pay the same price as the consumer in Accra, and the consumer in Akokobi should pay the same price as the consumer in Tema,” he noted.
At the end of every month, oil marketing companies submit claims to the NPA to recover their distribution costs through the fund.
More Flexibility Since 2024
Tasunti also revealed that the regulator has gradually revised pricing guidelines to promote stronger competition in the industry.
Previously, OMCs were required to set a price at the beginning of a pricing window and maintain that price until the window ended, even if market conditions changed.
Under revised rules introduced in 2024, companies can now adjust prices daily within the pricing window if they wish to respond to market dynamics.
“So if an oil marketing company wants to reduce its price during the window, they can do so, but they must inform the regulator beforehand,” he explained.
Encouraging Healthy Competition
The NPA believes the current pricing structure strikes a balance between deregulation and market stability. While companies are encouraged to compete and adjust prices to attract customers, the regulator maintains oversight to ensure that competition remains fair and sustainable.
Tasunti emphasised that the authority’s goal is to foster a healthy market environment that benefits consumers while ensuring the long-term stability of the petroleum distribution industry.
“Nothing stops oil marketing companies from being competitive. We have continuously adjusted the pricing guidelines to ensure competition exists, but it must be healthy competition that does not undermine the industry,” he said.
