The Africa Centre for Energy Policy (ACEP) has restated its opposition to the National Petroleum Authority’s (NPA) introduction of price floors in Ghana’s downstream petroleum sector, describing the policy as illegal, anti-competitive and detrimental to consumers.
In a statement reaffirming its 2024 position, the energy policy think tank said the directive exceeds the NPA’s legal mandate under the National Petroleum Authority Act, 2005 (Act 691). ACEP argued that the regulator’s decision reflects a broader failure to adapt its role to the realities of a deregulated petroleum market.
According to ACEP, several of the NPA’s existing functions are outdated but continue to be sustained through political arrangements that impose unnecessary levies on petroleum consumers and industry players. The group said the price floor policy underscores what it described as a deepening regulatory failure to adequately protect both consumers and legitimate businesses.
ACEP pointed to longstanding challenges in the downstream sector, including the influx of illicit and substandard petroleum products, revenue losses to the state through tax evasion by some Oil Marketing Companies (OMCs), excessive levies passed on to consumers, and persistent anti-competitive practices such as price undercutting.
Rather than addressing these issues directly, ACEP said the NPA has opted for a “lazy” regulatory response by imposing price floors, a move it warned would reward inefficiency, discourage competition and push pump prices higher for consumers.
The think tank further argued that the policy disproportionately benefits weaker OMCs and Bulk Oil Import, Distribution and Export Companies (BIDECs) that struggle to compete on pricing and volumes, while penalising efficient operators. It cautioned that such protectionist measures could stifle innovation, weaken competitive business strategies and ultimately undermine consumer welfare.
ACEP also questioned the regulator’s acknowledgement that substandard products are present on the market and that some companies are engaging in unethical pricing practices. According to the group, this admission suggests the NPA is aware of offending players but has failed to apply targeted enforcement, instead resorting to broad measures that could inadvertently benefit operators trading in illicit products.
The organisation urged the NPA to adopt what it described as progressive regulation, including data-driven monitoring, targeted sanctions against violators and stronger enforcement of competition rules, without undermining legitimate business practices that benefit consumers.
ACEP also criticised the structure of the downstream sector, noting that while about 200 OMCs and 30 BIDECs are registered, roughly 15 percent of OMCs account for about 90 percent of total fuel supply. It argued that maintaining a large number of marginal operators through regulatory protection comes at a significant cost to consumers and reduces overall market efficiency.
“It is time for businesses in the downstream sector to survive on the strength of their business acumen, not regulatory protection,” the statement said, adding that the NPA’s growing reliance on regulatory fees to sustain its expanding workforce is affecting its effectiveness.
ACEP reaffirmed its commitment to advocating for a competitive, consumer-focused downstream petroleum sector and called on OMCs and BIDECs opposed to the price floor directive to challenge the policy in court. The group pledged to support any legal action aimed at holding the NPA accountable in the public interest.
The statement was signed by Kodzo Yaotse, Policy Lead for Petroleum and Conventional Energy at ACEP.
Source: www.kumasimail.com
