NPA Sets New Price Floors for Petrol and Diesel Sales
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The minimum price for petrol has been set at GH₵12.73 per liter, while diesel will have a minimum price of GH₵13.43 per liter.
The National Petroleum Authority (NPA) has announced new price floors for petroleum products for the second pricing window, covering the period from October 16th to 31st, 2024. Under the new directive, the minimum price for petrol has been set at GH₵12.73 per liter, while diesel will have a minimum price of GH₵13.43 per liter. The NPA has emphasized that these rates serve as the lowest permissible prices, meaning no oil marketing company (OMC) is allowed to sell these products below the stated levels during this window.
In a notice addressed to Oil Marketing Companies (OMCs) and Liquefied Petroleum Gas (LPG) marketers, the NPA urged all players in the downstream petroleum sector to comply with the newly introduced price floors. The authority clarified that these minimum prices do not account for other operational costs, such as premiums imposed by International Oil Trading Companies (IOTCs) or the margins required by Bulk Import, Distribution, and Export Companies (BIDECs). Similarly, the profit margins of OMCs and LPG Marketers and Dealers are not included in the stated prices. These additional costs will remain independently determined by the companies, in line with the country’s Price Deregulation Policy.
The NPA introduced the price floor mechanism as a regulatory tool to prevent the practice of price undercutting, where companies sell below competitive rates to gain market share. The regulator argues that such practices, if unchecked, could destabilize the industry, affecting market fairness and long-term sustainability.
Although the NPA has recently suspended the price floor program for Bulk Oil Distribution Companies (BDCs) following feedback from stakeholders in that sector, it continues to enforce the policy for oil marketing companies. The suspension reflects the authority's responsiveness to sector specific concerns, but the overall policy remains in effect for the retail segment.
Despite its intentions, the price floor policy has not been without criticism. Some industry players argue that the program goes against the principles of a free market, limiting competition and forcing companies to sell at fixed minimum prices. In response to these concerns, the NPA has defended its decision, stating that the policy was developed through consultations with key industry stakeholders. According to the authority, the input and recommendations from industry players during these discussions guided the rollout of the price floor system, with the aim of curbing unhealthy pricing practices and promoting industry stability.
The NPA’s actions highlight its ongoing efforts to strike a balance between market deregulation and the need for fair competition in the petroleum sector. While some challenges persist, the authority remains committed to monitoring industry practices and implementing policies that foster both competition and stability.
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