Fuel price deregulation will benefit Ghanaians if… – ACEP

The full deregulation of the downstream petroleum sector by the government will bring relief to Ghanaian consumers if government adheres to the law, the African Centre for Energy Policy (ACEP) has said.

At a press briefing, the Deputy Executive Director of ACEP, Benjamin Boakye noted that “the deregulation move by government is a positive one towards demystifying the petroleum downstream market which could be beneficial to consumers and reduce the impact of persistent shocks and anxiety introduced into the market whenever the National Petroleum Authority announces hardly predictable prices of petroleum prices.”

ACEP says the government should among other things, “abolish the Tema Oil Refinery Debt Recovery levy on petroleum products which ACEP believes Ghanaians have overpaid the debt, terminate the imposition of Exploration Levy on petroleum products, and abolish the 7.5 pesewas per liter Road Fund Levy and BOST margin which is not meant for strategic reserve but for infrastructure.”

The Executive Director of ACEP, Dr. Mohammed Amin Adam added that “the pricing of the product should rather shift from the bi-weekly custom to daily review so if the Ghana Cedi appreciates with the major trading currencies, the changes can immediately reflect in the change in price of the products to relief the burden on the consumer.”

He however noted that there should be conscious efforts at improving the macroeconomic indicators so that consumers will not be disadvantaged.

“As part of the deregulation, government should also be fair to persons who want to enter the oil marketing business. The 28 OMCs in Ghana are not enough to bring about the competition expected to exist between the OMCs which will reduce prices to benefit the consumer,” Dr. Amin opined.

According to ACEP, in countries that have fully deregulated, prices initially go up but eventually become competitive and lower.

ACEP concludes that government will have to “fast track the amendment of the NPA Act 691 to recognize the full price deregulation, which in its current state does not support the changes.