The Institute for Energy Security (IES) has thrown its weight behind the National Petroleum Authority’s (NPA) price floor policy, describing it as a vital safeguard for fair competition and long-term stability in Ghana’s deregulated petroleum market.
According to the IES, the price floor is not a price-fixing tool, but a competition-stabilizing mechanism designed to prevent predatory pricing, protect smaller oil marketing companies, and ensure supply continuity. The think tank’s stance comes in response to StarOil Ghana’s claim that it could sell petrol at GH¢9.50 per litre during off-peak hours if not for the price floor regime.
The IES has questioned the practicality of time-based fuel discounts, noting that operational costs such as storage, financing, distribution, and inventory risks remain constant regardless of the time of sale. “Fuel retailing is not a digital service where marginal costs disappear at night,” the IES stated.
The institute has also raised concerns about the potential consequences of dismantling the price floor, warning that it could lead to market concentration, supply disruptions, and ultimately higher prices for consumers. According to the IES, international experiences show that unregulated price wars in fuel markets often end badly for consumers.
The NPA has been urged to investigate StarOil’s pricing claims and cost structures, assess compliance with existing regulations, and examine potential predatory pricing practices. The IES emphasized that regulation must be evidence-based, transparent, and enforced uniformly, particularly in markets that directly affect national economic stability and household welfare.
The debate highlights the challenges of balancing consumer relief, fair competition, and industry sustainability in Ghana’s downstream petroleum sector. As the discussion continues, one thing is clear: the price floor policy will remain a critical component of the country’s fuel pricing regime for the foreseeable future.
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Author: Korkor Anumu
