IES defends NPA price floor as safeguard for fair competition

The Institute for Energy Security (IES) has defended the National Petroleum Authority’s (NPA) price floor policy, describing it as a critical safeguard for fair competition and long-term stability in Ghana’s deregulated petroleum downstream market.

In a press release dated January 19, 2026, the Institute addressed recent public comments by the Chief Executive Officer of StarOil Ghana, who suggested that the NPA price floor prevents the company from selling petrol at significantly lower prices, including claims that fuel could be sold at GHS 9.50 per litre during off-peak night hours if the policy were removed.

According to IES, while public discourse on fuel pricing is healthy, such discussions must be grounded in sound market principles, regulatory context, and the long-term interests of the petroleum sector. The Institute stressed that the downstream petroleum market is capital-intensive, high-risk, and highly exposed to global price volatility and exchange rate fluctuations.

IES explained that the price floor was introduced not as a price-fixing tool, but as a competition-stabilising mechanism designed to prevent predatory pricing, protect small and emerging Oil Marketing Companies (OMCs), and preserve healthy competition across the sector.

The Institute warned that unregulated price wars could allow dominant firms to temporarily sell below cost, forcing smaller competitors out of the market and ultimately leading to monopolisation, supply disruptions, and higher fuel prices for consumers.

Commenting on proposals for selective price reductions during certain hours, IES said fuel retailing does not operate like a digital service where costs disappear at night, noting that storage, financing, distribution, and inventory risks remain constant regardless of the time of sale.

IES further questioned whether prices below the regulatory floor would be economically sustainable, whether losses could be cross-subsidised to crowd out competitors, and what would happen to prices once smaller OMCs exit the market.

The Institute also referenced public responses from industry players, including GOIL Ghana, whose Group CEO has challenged claims that some companies could not compete even at the approved floor price of GHS 9.80 per litre within the current pricing window.

Given the seriousness of the claims made, IES has formally called on the NPA to investigate StarOil’s pricing assertions, examine potential attempts at predatory pricing or market distortion, assess compliance with existing petroleum pricing regulations, and reaffirm the principles underpinning the price floor regime.

IES emphasised that regulation in the petroleum sector must be evidence-based, transparent, and uniformly enforced, especially in a market that directly affects national economic stability and household welfare.

The Institute concluded by urging stakeholders to move beyond headline-grabbing statements and engage in informed discussions on market economics, competition policy, and long-term consumer protection, reaffirming its commitment to policies that promote fair competition, energy security, and sustainable consumer welfare.