Ghana’s fuel price debate has resurfaced a familiar policy dilemma: how to stabilise markets without short-changing consumers, like we saw the National Communication Authority do when it declared MTN a significant market power without more to get the lagging Telcos to par.

In April 2024, the National Petroleum Authority (NPA) introduced a price floor in the downstream petroleum sector, setting a minimum ex-pump price for petrol, diesel and LPG.

The stated goal was to prevent destructive undercutting, protect smaller Oil Marketing Companies (OMCs), and ensure supply continuity, which, on the face of it, seems fair and well-intentioned yet leaves a large gap in its tracks.

Stability matters, but stability that systematically blocks consumer benefit is a high price to pay.

There have been periods when petroleum cost pressures eased through temporary cedi gains, lower international product prices, and or improved supply conditions.

In a competitive market, such improvements should translate into faster and deeper price reductions at the pump but that has not been our fate due to a price floor.

A binding price floor, as anybody minded to look around will know, interrupts that process. Even when some OMCs, including Star Oil, announce modest reductions, the floor limits how far prices can fall, in effect, muting the benefit to consumers.

Here is the core consumer-welfare concern: when costs fall, prices should follow. Any rule that prevents this transfer needs strong justification and constant scrutiny.

Price floors are often (and even in this case) defended as a shield against predatory pricing. But predation is only one way competition may disappear. When price competition is constrained, OMCs may compete on scale, coverage, access to finance, storage capacity, logistics, convenience, augmented services and many more. Those advantages overwhelmingly favour already efficient incumbents who most often than not have the capacity to compete on price.

A minimum price guarantees a margin for all firms, but because efficient firms operate at lower unit costs, they earn larger absolute profits from the same regulated price than smaller and higher-cost rivals. Those profits may then be reinvested into more filling stations, better storage and wider distribution. Over time, competition is weakened without any need for price undercutting.

This is not a theory invented for Ghana. It is a well-documented outcome in regulated markets worldwide. When prices are fixed from below, non-price competition becomes the exclusion tool, and incumbents usually win.

Any price intervention must pass a simple test: are consumers better off than they would be under effective competition? That requires evidence.
So far, there are no publicly available impact assessments showing how the price floor has affected:

1. the gap between wholesale costs and retail prices,
2. the speed of price pass-through when costs fall,
3. market concentration among OMCs,
4. entry and exit dynamics.

Without such data, consumers are asked to accept higher-than-necessary prices on trust, and trust is not a policy instrument.

Competition law teaches a clear lesson: price remedies alone do not fix structural market power imbalance. Where dominance is rooted in scale, networks, or access to capital, regulators elsewhere combine pricing tools with structural measures, access rules, infrastructure sharing, asymmetric obligations, and mandatory reviews.

Ghana’s price floor stands largely on its own. There is no published sunset clause, no mandatory review against objective benchmarks, and no transparent monitoring of margins. That creates a risk that a temporary stabilisation tool becomes a permanent market feature, inconsistent with deregulation principles and proportional rule-making.

If the objective is to protect consumers while preserving competition, price regulation must be part of a broader toolkit. I propose the following five reforms that I believe are essential:

1. Consumer-welfare benchmarks
   Interventions should be justified by measurable outcomes: faster pass-through when costs fall, lower average prices over time, and reduced volatility that benefits households.
2. Sunset clauses and mandatory reviews
   Price floors should expire automatically unless renewed after a transparent, data-driven assessment.
3. Margin and pass-through transparency
   Regular publication of wholesale-to-retail spreads would show whether efficiency gains are reaching consumers or being captured as rents.
4. Competition-enhancing measures
   Where scale advantages matter, regulators should consider access to storage and logistics, capacity sharing, or targeted support for viable but scale-constrained firms.

Price regulation can deliver short-term calm, but calm is not the same as fairness, and stability is not a substitute for competition. Global experience shows that when price controls are left to operate alone, they often protect incumbents, delay efficiency among underdogs, and quietly transfer costs to consumers. I bet this formed the basis of our initial deregulation.

Ghana can do better. A fuel market that genuinely serves the public interest must allow prices to fall when costs fall, reward efficiency without necessarily entrenching dominance, and subject interventions to continuous review.

Price regulation is not enough. We'd better do it right or leave the market be!