The Chamber of Petroleum Consumers (COPEC) has called for a review of the price floor regime in Ghana’s downstream petroleum sector, arguing that the ongoing price competition among oil marketing companies (OMCs) highlights the benefits of a more liberalised market.
According to COPEC, a fully competitive environment enables efficient players to thrive while offering better value to consumers.
The call comes amid an intensified price war between Star Oil and GOIL during the second pricing window of March. Both companies have adjusted pump prices multiple times, often in direct response to each other’s moves.
Executive Secretary of COPEC, Duncan Amoah, who has long advocated the removal of the price floor, said the current competition is already delivering strong benefits to consumers.
He added that even greater gains could be achieved if the price floor is scrapped entirely to allow for more market-driven pricing, despite ongoing geopolitical tensions in the Middle East.
“If you have a situation where Star did stick with all of us for good prices, together with other OMCs, don’t forget the likes of Zen, the likes of JP, PETROSOL and the others have all done their bit to deliver very good competitive prices over the period. Star comes on top. You have a situation where Goil now believes, well, it will reclaim top spot.
“So anything that could be done by way of shedding margins from time to time in order to be able to be attractive price wise would be done. So even in times like these when geopolitical factors have pushed prices forward, you still have the OMCs doing their best in order to be able to deliver very competitive prices to the consumer. For us, it is a positive development, it is welcoming.
“We believe that it sends, again, the strongest signal to the Ghanaian authorities to desist from that whole price floor conversation because when you leave the markets to evolve, you get to a point where the better one wins, the best price wins, the better quality probably wins, and the one who offers full value also wins,” Duncan Amoah said in a Citi Business News interview.
For the second pricing window of March, the price floor has been set at GH¢11.57 per litre for petrol, GH¢14.35 for diesel, and GH¢10.67 for LPG.
These benchmarks represent the minimum prices at which OMCs and LPG marketing companies are permitted to sell petroleum products within the current pricing window.
