The general public will now have access to reliable information on petroleum pricing and trends following the launch of the Ghana Chamber of Bulk Oil Distributors’ (CBOD) Petroleum Price Indicators in Accra last week.
The move is in line with the price liberalisation of the petroleum downstream sector which enables Bulk Oil Distribution Companies (BDCs) and Oil Marketing Companies (OMCs) independently price their products.
The CBOD Price Indicators include the Ex-Refinery Price Indicator (XPi), Oil Traders Index (OTi) and Fuel Forex Rate (FuFeX30).
Chief Executive Officer of the CBOD, Mr Senyo Hosi said the XPi and the OTi will be published every week through the issuance of press releases as part of market reports emanating from the chamber.
He said publishing of the indicators was a major step to ensure fair and competitive pricing for consumers.
Mr Hosi, however, refuted claims of any form of syndication between BDCs and OMCs to reduce prices of petroleum in order to limit competition within the market, adding that there is very little incentive for BDCs to connive with some of the players in this liberal market where OMCs fix prices by themselves based on the formula.
“We have 86 players and 41 LPGMCs. There are too many players here; everybody needs to grow big. The bigger you become, the better you can procure from a BDC. So why will I want to agree with a Shell or a Goil, who is big enough to sell at the same price, when overnight I’m going to be outmuscled because I cannot be as competitive with my procurement as they would be>” he asked.
Welcoming the move, Chief Executive Officer of the Ghana Institute of Public Policy Options (GIPPO), Dr Charles Wereko-Brobbey, said the introduction of the pricing formula was a clear indication of the BDCs preparedness to be responsible players within the economy.
“This will provide the opportunity for consumers and the general public to know who is making unreasonable profits, and to assure consumers that they are not taken for a ride,” he noted.
The Executive Director of the Africa Centre for Energy Policy (ACEP), Dr Mohammed Amin Adams, on his part, called on the National Petroleum Authority (NPA) to create a portal and publish the ex-pump prices of petroleum products in order to keep consumers well informed.
In his view, anytime an OMC wants to change its ex-pump price, it should inform the NPA about the intended change. The price of OMCs cannot exceed the ceiling announced by the NPA.
The XPi is an estimate of Ex-Refinery prices at which the BDCs may sell their petroleum products to OMCs.
It is based on the maximum allowable US dollar indexed price BDCs would have sold petroleum products under the immediate-past regulated regime and converted in Ghana cedis at a referenced foreign exchange rate known as the FuFeX30.
It is not a definition of what BDCs must sell at. In the estimation of the CBOD, BDCs are likely to sell at prices lower than the XPi due to competition.
The OTi is an indication of the difference between the average actual traded ex-refinery prices by the BDCs and the XPi represented in percentage terms while the FuFeX30 is a 30-day forward forex rate computed using the covered interest parity model adjusted by the Ghana Sovereign Bond Spread.
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