NPA Defends Fuel Price Floor

By Esther Korantemaa Offei

The National Petroleum Authority, NPA, has defended Ghana’s fuel price floor, saying the policy is necessary to maintain competition, protect consumers and ensure petroleum products remain available on the market.

Director of Economic Regulation and Planning at the NPA, Abass Tasunti, said similar pricing interventions exist in several developed economies, including the United States and countries in Europe.

He explained that the type of regulation adopted by a country depends on the structure and needs of its market.

“I don’t know of any market that is more deregulated than the U.S. If you go to the U.S. today, there are several states that have similar price laws. If you go to Europe, it is there,” Mr Tasunti said.

He said Ghana’s approach was designed to balance the interests of consumers and businesses, adding that the regulator’s responsibility was to protect both sides of the petroleum market.

“In Ghana’s context, remember the regulator is there to protect both the industry and the consumer,” he said.

Mr Tasunti maintained that the price floor does not prevent competition among Oil Marketing Companies, OMCs, because several cost components remain outside the pricing mechanism.

He said data available to the NPA showed that the policy had not disadvantaged consumers since its introduction.

“We have the data to prove that the price floor does not disadvantage the consumer in any way,” he said.

According to him, consumers naturally want lower fuel prices, but excessive price reductions could affect the ability of businesses to remain viable and could eventually threaten the availability of petroleum products.

“You always want a low price, but it must not come at the cost of having the products available,” he said.

Mr Tasunti also said that over a two-year period, the NPA had observed instances where some OMCs did not match the price floor, demonstrating that the policy still allowed room for competition.

He explained that individual OMCs could sometimes choose to reduce prices based on their own financial capacity, but such reductions should not be interpreted as evidence that the regulated price floor was harming consumers.

He said the policy had helped maintain market supply and supported the continued operation of businesses within the sector.

The NPA therefore believes the price floor remains a sound regulatory measure that balances competitive pricing with market stability, business sustainability and consumer protection.