Sharif Mahmud Khalid, Economic Advisor to the Office of the Vice President, has called for a review of Ghana’s petroleum regulatory framework, arguing that existing laws and regulations may no longer be fit for purpose amid ongoing debates over fuel price controls.
Speaking on the controversy surrounding the price floor policy on Channel One TV’s The Big Issue on Saturday January 24, he stressed the need to reassess both the regulatory instruments and the legal regime governing the downstream petroleum sector.
“I think we need to revisit the regulations and revisit the act and see whether they are fit for purpose,” Khalid said.
“Again, my emphasis, this is where legal regime comes in. In the absence of competition laws, in the absence of consumer protection, we are having strong regulatory institutions that may act arbitrarily.”
His comments come as industry players continue to debate the National Petroleum Authority’s price floor policy, which is provided for under the 2024 Petroleum Products Pricing Guidelines. The policy sets a regulator-approved minimum price for petroleum products, with petroleum service providers required to comply. Breaches attract fines of up to GH¢5,000.
The price floor has remained contentious since its introduction, with critics arguing that it suppresses competition and limits the potential for price reductions that could benefit consumers. The debate intensified during the second pricing window of January, as price competition resurfaced across the downstream sector.
Tensions escalated further when Star Oil’s Chief Executive Officer, Philip Tieku, suggested that petrol could be sold at GH¢9.50 per litre during off-peak hours to support Ghana’s night-time economy, if not for the constraints imposed by the price floor.
His comments drew a response from GOIL Managing Director Edward Bawa, who questioned the feasibility of further price reductions when some companies were already selling above the regulated floor of GH¢9.80 per litre for petrol in the current pricing window.
The differing views prompted the Chamber of Oil Marketing Companies (COMAC) to convene a board meeting to deliberate on the future of the price floor policy and related industry concerns.
However, after the meeting, Star Oil announced the suspension of its membership from COMAC, citing dissatisfaction with how the Chamber has handled opposition to the policy.
Star Oil maintains that its position on removing the price floor has not been adequately represented in COMAC’s engagements, while COMAC says it has initiated discussions with the company and remains confident of reaching a unified industry position.
Read also
NPP Race: Internal party ‘heat’ normal during primaries – Miracles