Former Member of Parliament for Dormaa East and a former member of Parliament’s Energy Committee, Paul Apreku Twum Barimah, has called for the complete removal of the fuel price floor policy, insisting that recent adjustments by the National Petroleum Authority, though commendable, do not go far enough to deliver meaningful relief to consumers.
In a statement responding to the NPA’s decision to reduce the minimum price threshold for petroleum products, Lawyer Twum Barimah acknowledged the move as a step in the right direction, noting that it reflects a level of responsiveness on the part of the Authority’s leadership, particularly its Chief Executive, Edudzi Tamakloe.
However, he maintained that the underlying policy remains fundamentally flawed and must be scrapped entirely if Ghana is to realise the full benefits of a deregulated downstream petroleum sector.
“Reducing the floor price is commendable, but the policy itself must be removed altogether to allow competition to work effectively,” he stated.
According to Mr Twum Barimah, the continued enforcement of a minimum price distorts the market by preventing oil marketing companies from competing freely on price. He stressed that several industry players have the operational efficiency and supply advantages to sell fuel at lower rates but are constrained by regulatory limits imposed by the NPA.
“I am aware of oil marketing companies that can sell petrol and diesel below the current rates, but they are unable to do so because of the floor price policy,” he said.
Mr Twum Barimah argued that eliminating the price floor would enable efficient operators to pass cost savings directly to consumers, particularly benefiting low income households and transport operators who are most affected by fuel price fluctuations.
He further explained that in a market where petroleum products are largely standardised, price becomes the primary basis for competition, and any restriction on pricing undermines the principles of deregulation.
Mr Twum Barimah emphasised that the price floor creates a situation where companies are unable to compete aggressively, leading to near uniform pricing across the market. He added that this reduces incentives for innovation, efficiency, and cost reduction, while also posing challenges for smaller and emerging firms seeking to gain market share.
He also raised concerns about the policy’s implications during periods of declining global crude oil prices, noting that a fixed minimum price could prevent the transmission of global price reductions to the local market, thereby denying consumers the benefits of favourable international trends.
Mr Twum Barimah further pointed to ongoing geopolitical tensions involving the United States, Israel and Iran as factors contributing to volatility in global oil markets. He explained that in such an environment, some oil marketing companies are able to secure products at relatively lower costs through alternative supply arrangements, but are unable to reflect these advantages at the pump due to the existing pricing regime.
He argued that the introduction of the fuel price floor policy in April 2024, which was intended to curb what the NPA described as unhealthy competition and to stabilise the downstream sector, has instead reintroduced elements of price control into a system that was meant to be deregulated.
“Deregulation was intended to promote efficiency and competition. A price floor defeats that objective and limits the benefits that should accrue to consumers,” he stressed.
At the heart of the matter, Mr Twum Barimah maintained, is a fundamental policy choice between market stability through regulation and consumer benefit through full competition.
For him, the path forward is clear. He insisted that only a fully deregulated regime, free from price controls, can drive efficiency, enhance competition and ultimately lead to lower fuel prices for Ghanaians.