The National Petroleum Authority (NPA) says Oil Marketing Companies (OMCs) are free to reduce fuel prices at any time, insisting the downstream petroleum sector is fully competitive.

Abass Ibrahim Tasunti, Director of Economic Regulation and Planning at the NPA, said the current pricing regime allows companies to adjust prices within the pricing window whenever market conditions permit.

“In 2015, when we did regulated pricing, where we now allow the oil marketing companies to determine their price independently, when we started seeing competition in the industry, LI was amended, LI222, and remember this instrument from Parliament that LI, or section 1C, still mandates oil marketing companies to keep a uniform price across their retail outlets.”

He explained that the law allows companies to set their own prices, but requires them to maintain the same price across all outlets within their network.

“And so inasmuch as oil marketing companies determine their own prices, and we have prices varying between companies, the company must maintain a uniform price.”

According to him, the rule exists because of the Unified Petroleum Price Fund, which equalises distribution costs across the country.

“And the reason is that we in the pricing formula, as you explained earlier, we have the Unified Petroleum Price Fund, which ensures that the cost of distributing petroleum products from the depots to the retailer is borne by this fund.”

He said this arrangement ensures fairness for consumers regardless of location.

“Oil marketing companies, on their own, do not pay for that cost. So at the end of every month, they submit claims to us to pay for the cost of transportation, and this is to ensure that the consumer in Wa, for example, pays the same price as the consumer in Accra, the consumer in Akokobi should pay the same price as the consumer in Tema.”

Tasunti stressed that companies are therefore not allowed to charge different prices within the same network.

“And so an oil marketing company does not differentiate prices between the same network.”

He noted that the authority has gradually adjusted its pricing guidelines to encourage stronger competition in the sector.

“Along the line, you know, we are trying to make sure that, as much as we deregulated, competition is promoted, but competition must be healthy. It shouldn’t be a competition that kills the industry.”

He explained that earlier guidelines required companies to set a price for the entire pricing window and maintain it until the period ended.

“And even let me add this, that one of the guidelines earlier was also that oil marketing companies will set a price for the window, and within the window, they keep the price until the window ends.”

This meant companies could not revise prices even if market conditions changed.

“So if an oil marketing company starts the window with a price of less ¢11, they keep the price till the window ends. They don’t amend the price.”

The NPA later revised the policy after concluding that the restriction limited competition.

“This, we realise, does not really allow competition, because within the cost of the window, several factors can allow an oil marketing company to revise its price.”

“And so we allowed oil marketing companies, since 2024, to revise their price on a daily basis, within the cost of the window.”

He explained that companies only need to notify the regulator before making adjustments.

“So if an oil marketing company wants to reduce its price throughout the window, they can do so, but they have to inform the regulator that tomorrow, for example, I will review my price. You have to inform us today.”

Tasunti maintained that the framework gives companies the freedom to compete while maintaining order in the market.

“And so nothing stops all marketing companies from being competitive. We’ve adjusted this pricing guideline over the period to allow them to be competitive.”