Mr. Benjamin Nsia, an energy expert, made these remarks while discussing the recent increases in petroleum prices in an interview with Citizen Kofi Owusu on Ahotor FM’s Adekyee Mu Nsem programme in Accra.
An energy analyst has called on the National Petroleum Authority (NPA) to tighten enforcement of petroleum pricing regulations and investigate alleged unfair pricing practices within Ghana’s downstream petroleum sector, warning that persistent price instability is undermining consumer confidence, economic planning and the country’s energy security.
Speaking during the interview, Mr. Nsia questioned why fuel prices differ significantly among oil marketing companies operating under the same pricing window, describing the situation as unfair to consumers.
According to him, Ghana’s petroleum downstream industry operates under a regulated pricing regime that takes into account international petroleum prices, exchange rates and other approved cost components over a specified pricing period. He stressed that while competition is encouraged, companies must not abuse the pricing system.
«”If any company deliberately manipulates prices outside the approved framework, it is wrong and unacceptable. The National Petroleum Authority must ensure that all petroleum service providers comply with the regulations because consumers deserve fairness and transparency,” he stated.»
Mr. Nsia argued that although oil marketing companies have some flexibility within the deregulated pricing regime, the prices charged at the pumps should reasonably reflect movements on the international market.
Using diesel prices as an example, he explained that international prices have fluctuated considerably in recent days. He noted that diesel traded at about US$1,043 per metric tonne before increasing to around US$1,100 per metric tonne, compared with approximately US$1,300 per metric tonne previously.
He explained that these international market indicators are among the benchmarks used in determining local fuel prices and should guide pricing decisions under Ghana’s petroleum pricing framework.
“We are not saying prices must automatically be reduced every day. The pricing regime allows competition, but that competition must be fair and transparent. What we expect is strict compliance with the rules established by the National Petroleum Authority.”
Mr. Nsia noted that while the pricing regime permits competition among Oil Marketing Companies (OMCs), some operators appear to be taking undue advantage of consumers. He said the NPA has sanctioned some companies in the past for pricing irregularities and urged the regulator to intensify market surveillance and enforce compliance to guarantee price stability.
Price Stability Essential for Economic Planning
According to Mr. Nsia, stable fuel prices are essential for effective planning by businesses, transport operators and households.
He explained that unstable fuel prices increase transportation costs, production costs and the prices of goods and services, creating uncertainty throughout the economy.
He noted that petroleum products constitute an important component of Ghana’s inflation basket. Consequently, sustained increases in fuel prices contribute significantly to inflationary pressures.
“When fuel prices continue to rise, transport fares go up, industries spend more on production, electricity generation costs may also increase, and consumers ultimately pay more for goods and services. This fuels inflation and could compel the Bank of Ghana to raise the monetary policy rate, resulting in higher interest rates and increased borrowing costs for businesses.”
According to him, maintaining stable fuel prices is therefore critical to achieving macroeconomic stability, promoting investment, supporting industrial growth and improving business confidence.
Local Refining Key to Energy Security
Mr. Nsia stressed that increasing Ghana’s local refining capacity remains one of the most effective ways of strengthening the country’s energy security.
He explained that increased local refining would reduce dependence on imported refined petroleum products, minimise the impact of exchange rate fluctuations and international price volatility, and ensure a more reliable supply of petroleum products.
He added that sustained refinery operations would guarantee the availability, affordability and accessibility of petroleum products while helping to stabilise pump prices.
According to him, expanding refining capacity would also create thousands of direct and indirect jobs for skilled Ghanaian youth, reduce unemployment, increase household incomes, stimulate savings and investment, and contribute significantly to poverty reduction.
“Employment generation strengthens household incomes, creates wealth, promotes investment and improves the living standards of many Ghanaian families. A vibrant refining industry benefits the entire economy.”
Mr. Nsia further argued that a stronger refining industry would support Ghana’s industrialisation agenda by lowering energy costs for manufacturers and improving the competitiveness of local industries.
Tema Oil Refinery Needs Structural Reforms
Touching on the future of the Tema Oil Refinery (TOR), Mr. Nsia identified the refinery’s ownership structure as one of its greatest challenges.
According to him, successive changes in government often result in changes in management and strategic direction, making it difficult for the refinery to operate efficiently and sustainably.
He proposed that once TOR consistently records profits over a number of years, the government should consider listing the refinery on the Ghana Stock Exchange.
According to him, broadening ownership through a public listing would reduce political interference and introduce greater professionalism into the management of the refinery.
He suggested a shareholding structure where the private sector holds about 70 per cent equity while the Government of Ghana retains approximately 30 per cent as a strategic shareholder.
He argued that increased private sector participation would attract transformational leadership, strengthen financial discipline, minimise operational costs, reduce corruption and theft, improve efficiency and enable the refinery to source crude oil competitively from both local and international markets.
“A profitable company can easily attract financing, procure feedstock from different international sources and operate competitively. That is the direction TOR should be moving.”
Strengthening Corporate Governance
Beyond ownership reforms, Mr. Nsia called for stronger corporate governance anchored on transparency, accountability, responsibility and fairness.
He maintained that effective corporate governance is fundamental to sustaining profitability, attracting investment and restoring public confidence in the refinery.
According to him, institutions with sound governance systems are more competitive, more accountable to stakeholders and better positioned to contribute to national development.
He concluded that Ghana’s long-term energy security depends on strict enforcement of petroleum pricing regulations, stable macroeconomic policies, expanded local refining capacity and governance reforms that shield strategic national institutions from political interference.
“The sustainability of Ghana’s petroleum sector depends on strong regulation, responsible leadership, transparency and sound corporate governance. If these reforms are implemented effectively, Ghana will strengthen its energy security, create sustainable jobs, reduce inflationary pressures, support industrialisation and accelerate national economic transformation.”
By Stephen Kwaku Owusu Mintah | Ahotoronline | Accra
