The Managing Director (MD) of Engen Ghana Limited, Mr Henry Akwaboah has called for a thorough examination of the latest decision to allow importers and marketers of petroleum products to set their own prices instead of the National Petroleum Authority (NPA).
According to Mr Akwaboah, government ought to weigh the options carefully to ascertain whether the industry will be any better when importers are allowed to set their own prices.
The government is said to soon start the implementation of the advanced form of deregulation of the petroleum sector.
Analysts seem to be divided over the prospects of the development as some are of the view that prices could come down eventually as various players will compete to attract more customers to their service stations.
Others maintain that the industry is fraught with operational challenges which have over the years defied solutions.
In an exclusive interview with the Business Finder, the Engen boss feared the worst, should petroleum importers and marketers be allowed to fix their prices.
“Looking at the costs incurred by importers and marketers is it going to be any better when they begin setting their own prices?” he wondered.
He contended that the forex losses that result from the depreciation of the cedi remain a major challenge and will affect the pricing of the products, adding that the prices of products could hit the roof since no single importer or marketer would wish to operate at a loss.
Even though the plan by government is to completely wash its hands off the petroleum market, and allow forces of demand and supply to control it, there will still be some level of regulation, as the NPA may still have to decide the kind of petroleum products that can be sold on the market.
Meanwhile prices of petroleum products have been kept unchanged at the pumps, meaning the next two weeks consumers will buy the product at the same price they were buying it as at May 16.
Over the past few days, prices of crude oil and petroleum products have witnessed a marginal increase while the Ghana cedi has continued to depreciate.
Looking at the NPA’s own model for reviewing the products, prices should have gone up.
This means the government has again stepped in to prevent consumers from paying the actual cost for the product.
Even though it might come as a lot of relief to consumers now, the long-term impact might be bad for the economy and consumers
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