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BDCs to start setting petroleum prices this month

  • SOURCE: | Editor
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    Government has confirmed to Citi Business News that the National Petroleum Authority (NPA) will not be involved in the pricing of petroleum products effective June 15.
    Bulk Oil Distribution Companies (BDCs), importers of the petroleum products will be allowed the free hand to price their products to reflect the prices on the world market.BDCs as well as the Oil Marketing Companies (OMCs) have backed this move, insisting it will ensure full cost recovery and efficiency in the sector.

    According to the deputy Minister of Petroleum Benjamin Dagadu , the NPA will only be allowed to monitor the implementation of the pricing formula by the BDCs.

    “Basically most of the responsibilities of the NPA will be intact, they will monitor the FOB prices, and then monitor the implementation of the formula in the price build up”, he stated.

    Ghana has in the last 19 years tried without success to fully implement a deregulated petroleum sector.

    Government and the NPA were recently severely criticized for their selective implementation of the automatic adjustment formula after failing to reduce the ex-pump price of petroleum product during the slump in the price of crude on the world market.

    Meanwhile a strong advocate of the full deregulation policy, former Chief Executive of the NPA John Attafuah is calling for a modification of the Act establishing the regulator to ensure they don’t breach the laws of the country.

    “It means the NPA will have to be changed then because the Act allows the NPA to provide billing . I don’t know whether the NPA will now just announce and stay back or they are going to review what has been submitted to it and give it the green light or the Act is going to be changed so the NPA does not play that role again”, he stressed.

    According to the NPA Act, 2005 (Act 691), the regulator of the downstream petroleum sector is expected to monitor ceilings on the price of petroleum products in accordance with the prescribed petroleum pricing formula.

    Source:  http://business.citifmonline.com/2015/06/01/bdcs-to-start-setting-petroleum-prices-this-month/#sthash.4B66Wo2k.dpuf

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