The Chamber of Petroleum Consumers (COPEC) has criticized the National Petroleum Authority’s increase in price floors for the first pricing window in February.
Executive Secretary of COPEC, Duncan Amoah, in a Citi Business News interview, said the adjustment does not inure to the benefit of consumers, especially as Oil Marketing Companies begin revising pump prices.
He argues that the price floor undermines the deregulation framework of the downstream petroleum sector.
“As of this morning, one of the major companies, Goil, clearly is selling on the floor that the NPA has set. You and I are aware that normally, you have other companies wanting to go below that. But here we are
“So the consumer is being told that even though some of the oil marketing companies would have sold to you a little cheaper, the NPA has set a blanket floor that you should not be sold petrol products to. It’s counterproductive to the consumer interest, and I do think that somebody should prevail on the NPA to rethink this posture.
“You cannot deregulate and, on the other hand, seek to insist that, as for selling below a certain price, I will not allow you but when you sell above it, that’s okay. The is no ceiling, but the is a floor. That again reinforces our earlier conversation that this whole price floor thing is needless, especially in a deregulated environment where you would want the market to evolve with efficient pricing for consumers,” Duncan Amoah said.
He further argues that the regulator should not shield inefficient Oil Marketing Companies in the sector.
“The NPA cannot become the protector of oil marketing companies, over 229 of them, some of which have decided to be efficient. Others have decided to also go for their own profit. I don’t think that the NPA should be defending anybody at this point in a deregulated environment. It defeats the consumer interest largely,” Duncan Amoah added.
For the current window, the NPA has set the price floor for petrol at GH¢9.99 per litre, an increase from the previous GH¢9.80. This represents an increase of approximately 1.94%.
The price floor for diesel has been pegged at GH¢10.95 per litre, up from GH¢10.47, marking a more significant rise of roughly 4.58%.
The introduction of the new floors means that OMCs previously engaged in price wars to gain market share must now increase their prices to remain compliant.
Based on pricing from the second window of January, several companies will be compelled to raise their rates.
Industry watchers expect more OMCs to review and likely increase their pump prices in the coming days as the February window gains momentum.
