Adnan Adams Mohammed
The National Petroleum Authority (NPA) has introduced a new price floor for the second pricing window, effective from 16 to 31 October 2024.
The authority has set a minimum price of GH₵12.73 per litre for petrol and GH₵13.43 per litre for diesel.
This move means that no Oil Marketing Company (OMC) will be allowed to sell below these prices.
In a notice to OMCs and Liquefied Petroleum Gas (LPG) marketers, the NPA urged all industry players to comply with the new price floors during the specified window.
The NPA clarified that the set price floors do not include premiums charged by International Oil Trading Companies (IOTCs), the operating margins of Bulk Import, Distribution and Export Companies (BIDECs), or the Marketers’ and Dealers’ Margins for OMCs and LPG marketers.
These will be determined independently by the companies, in line with the country’s Price Deregulation Policy.
The introduction of the price floor mechanism is aimed at preventing price undercutting in the industry, which the NPA has warned could threaten its stability if left unchecked.
However, the NPA recently suspended the Price Floor programme for Bulk Oil Distribution Companies (BDCs) following concerns raised by stakeholders in that sector.
Despite this, the price floor remains in place for OMCs.
The programme has faced some criticism, with some industry players arguing that it contradicts free market principles.
Nonetheless, the NPA maintains that the policy was implemented after consultations with industry stakeholders and is designed to address the challenges of price undercutting in the sector.
Meanwhile as at October 17, Goil, the market leader, joined the list of OMCs upping their prices.
Allied Oil kicked off the wave of increases on October 16, 2024, with petrol now priced at GH₵12.73 per litre and diesel at GH₵13.73.
While the rise is modest, it is part of a broader trend of price hikes that have hit the industry this month.
Shell followed, pushing its petrol prices up by about 7%, now selling at GH₵14.72 per litre.
Diesel at Shell has also risen by 4.45%, hitting GH₵14.99 per litre.
Petrol saw a 7.89% spike, now retailing at GH₵14.49 per litre, while diesel climbed by over 4%, with prices at GH₵14.90 per litre.
Star Oil, the second-largest OMC, raised its petrol price by over 7% to GH₵13.99 per litre, while diesel prices jumped by 3.42% to GH₵14.19 per litre.
As more OMCs prepare to adjust their prices, further hikes are anticipated in the coming days.
Petrol has taken the biggest hit, with prices rising by more than 7%, while diesel has climbed over 4%.
OMCs are attributing these changes to rising crude oil prices on the global market, coupled with the depreciation of the cedi, which puts additional pressure on fuel costs.
Over the past two days, crude oil prices on the international market have dipped, with Brent Crude falling from over $80 per barrel to between $73 and $99 on October 17.
