Former Dormaa East MP and ex-member of Parliament’s Energy Committee, lawyer Paul Apreku Twum Barimah, is calling for the complete removal of the fuel price floor policy, saying recent reductions by the National Petroleum Authority fall short of giving consumers real relief.
Speaking on Rainbow Radio 87.5FM’s Frontline Morning Show, Twum Barimah described the NPA’s decision to lower the minimum price threshold for petroleum products as “a step in the right direction” and credited NPA Chief Executive Edudzi Tamakloe for being responsive. But he insisted the policy itself is flawed and must be scrapped to unlock the full benefits of a deregulated downstream sector.
“Reducing the floor price is commendable, but the policy itself must be removed altogether to allow competition to work effectively,” he told host Kwabena Agyapong.
Lawyer Twum Barimah argued that the price floor stops oil marketing companies from competing on price, even when they have the efficiency and supply deals to sell petrol and diesel cheaper.
“I am aware of oil marketing companies that can sell below the current rates, but they are unable to do so because of the floor price policy,” he said.
Scrapping it, he explained, would let efficient operators pass savings directly to consumers, especially low-income households and commercial drivers hit hardest by fuel price swings. In a market where fuel quality is mostly the same, he noted, price is the main way companies compete. The floor, therefore, undermines deregulation.
According to Twum Barimah, the minimum price leads to near-identical pump prices across the market. That reduces the incentive for companies to innovate, cut costs, or improve efficiency. It also makes it harder for smaller, newer firms to break into the market and grow market share.
He also warned that during global crude oil price drops, a fixed floor could block those savings from reaching Ghanaian pumps, denying consumers the upside of favourable international trends.
Pointing to ongoing geopolitical tensions between the US, Israel, and Iran, Twum Barimah said global oil markets remain volatile. Some OMCs, he claimed, are able to source products cheaper through alternative arrangements, but the pricing regime prevents them from reflecting that at the pump.
The fuel price floor was introduced in April 2024 to curb what the NPA called “unhealthy competition” and to stabilise the downstream sector. But Twum Barimah argues it has reintroduced price control into a system meant to be free.
“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.
For him, the choice is between market stability through regulation and consumer benefit through full competition. He insists only a fully deregulated regime, free from price controls, will drive efficiency, boost competition, and bring fuel prices down for Ghanaians.
By: Rainbowradioonline.com/Ghana