NPA to monitor application of petroleum pricing formula

Moses Asaga, Chief Executive of the National Petroleum Authority (NPA) has said the Authority will monitor the application of the prescribed petroleum pricing formula to ensure that all service providers appropriately adhere to the formula.

The increase in the prices of petroleum products, according to the NPA, is aimed at achieving full price deregulation of petroleum downstream sector.

But Dr. Charles Wereko-Brobby, Chief Policy Analyst of the Ghana Institute for Public Policy Options (GIPPO), questioned the legitimacy of the NPA’s decision to allow Bulk Oil Distribution Companies (BDCs) to price petroleum products.

Government is now employing full deregulation and the NPA will no longer set prices but allow the market forces to determine the price. The prices of petroleum products witnessed a four percent upward adjustment, except for premix fuel and residual fuel oil, a statement from the National Petroleum Authority (NPA) announced.

Petrol prices has been increased by GH¢14p per liter which translates into GH63p per gallon (i.e. 4.5 litres). Diesel has also been increased by GH¢14p.

This indicate that Oil Marketing Companies (OMCs) are free to sell their products below the four percent price even though minor increases are expected in the coming weeks to eventually clear all unpaid subsidies.

The prices of other commodities are also expected to go up since the increase in petroleum prices will affect transportation fares.

Meanwhile, the Minority in Parliament is said to be preparing to go to court to force the NPA to resume its duties of pricing petroleum products.

Minority spokesperson on Energy, K.T Hammond, described the development as an illegality, which must be corrected.

“For now, we are worried about the constitutionality of it. It is for NPA to set the prices, it is not GOIL or the OMCs. We would have to go to court to stop this government from proceeding with this illegality. It is wrong and we will not allow it,” he said.

The rising prices of petroleum products on the world market and the depreciation of the country’s currency are some of the factors that have occasioned the increment.

Analysts argued that the petroleum price adjustment announced by the NPA was part of conditionalities prescribed by the IMF for Government to resolve the economic challenges.