The Chamber of Petroleum Consumers (COPEC) has sharply criticized the National Petroleum Authority (NPA) for raising price floors in the first pricing window of February, calling it counterproductive in a deregulated downstream petroleum sector.
In an interview on Citi Business News, COPEC Executive Secretary Duncan Amoah argued that the adjustment harms consumers, especially as Oil Marketing Companies (OMCs) revise pump prices upward.
He highlighted that major player Goil is now selling at the NPA’s set floor, preventing others from offering lower prices.
“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,” Amoah said.
“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.”
Amoah stressed the contradiction in deregulation: “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. There is no ceiling, but there 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.”
He also urged the NPA to stop shielding inefficient OMCs. “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,” Amoah added.
For this window, the NPA raised the petrol price floor to GH¢9.99 per litre from GH¢9.80 a 1.94% increase. Diesel’s floor climbed to GH¢10.95 per litre from GH¢10.47, up 4.58%.
This forces OMCs previously waging price wars to hike rates for compliance. Drawing from January’s second window, several firms must now adjust upward.
Industry observers predict more OMCs will review and raise pump prices as soon as February’s window progresses.
Story by: Mercy Addai Turkson #ahotoronline.com