Fuel Price Increase Just 1.08% – NPA Condemns Demo

The National Petroleum Authority [NPA], has described the expected demonstration in protest of price increases in petroleum products, as being in bad faith and misleading to the public.

The NPA, in a statement, said it was of the “considered view that the reasons for the intended demonstration are anything but noble” given the interventions it has been making.

These interventions have seen prices rise by just between 0.66 percent and 1.08 percent, according to the statement.

The NPA advised stakeholders to seek clarity from them to “ensure that the public is not misled by those who are motivated by reasons other than those of national interest.”

The Chamber of Petroleum Consumers (COPEC) and Industrial and Commercial Workers Union (ICU) are spearheading the protest against the price increase of petroleum products.

Use of Stabilization and Recovery Levy

Providing some background to the situation, the Authority explained that the prices of petroleum products have risen by about 18 percent on the international market since November 2017.

“Under the current price deregulation regime which has been in effect since July 2015, price volatility on the international market is expected to directly impact domestic pump prices because the government has no direct control over the setting of the bi-weekly prices of petroleum products,” it noted.

But the NPA says it “has since December 2017 used upfront, the expected receipts from the Price Stabilization and Recovery Levy (PSRL) in the price build-up as a mechanism to bring stability to prices.”

At the end of 2017, the NPA announced that prices of petrol and Liquefied Petroleum Gas (LPG) would remain fairly stable at the pumps from January 1 because of the activation of the Price Stabilization and Recovery Levy.

Before this, the NPA had directed all Oil Marketing Companies and LPG Marketing Companies to use revised prices in the Price Stabilization and Recovery Levy Act to control recent price increases in petroleum products.

The levy was, however, unable to prevent the fuel price increases, which COPEC had sounded warnings of in January.

Price increase could have been higher

This notwithstanding, the NPA has said its interventions prevented the fuel prices from rising much higher than what is seen at the pumps.

“This intervention by the government has brought down the expected increase of petrol’s price for the period 1st – 15th February 2018 from 5.06% to 2.16% and from 3.60% to 1.26% for diesel. Despite the expected increases above after the intervention, the actual price changes observed on the market at the moment range between 0.66% and 1.08%,” the NPA explained.

It added that, a “large majority of Oil Marketing Companies (OMCs) still have their prices unchanged whilst some have even reduced their prices, and consumers are at liberty to purchase petroleum products from OMCs with competitive prices as expected under a price deregulated regime.”

Find below the full statement

6th February 2018

INCREASES IN EX-PUMP PRICES OF PETROLEUM PRODUCTS

The National Petroleum Authority (NPA) has received notice of an intended demonstration by the Chamber of Petroleum Consumers (COPEC) and Industrial and Commercial Workers Union (ICU) ostensibly in response to recent increases in price of petroleum products at the pump by some selected Oil Marketing Companies.

We do recognise that the right to demonstrate for or against any course is a constitutionally guaranteed one and COPEC will be acting within its right as such.

We are however of the considered view that the reasons for the intended demonstration are anything but noble having regard to the interventions made time and again by the NPA by way of the Price Stabilisation interventions over the past three (3) months. The truth of the matter are as follows:

1. Prices of petroleum products have been on the rise on the international market. For instance the prices of petrol and diesel on the international market have increased cumulatively by 17% and 19% respectively since November 2017;
2. Under the current price deregulation regime which has been in effect since July 2015, price volatility on the international market is expected to directly impact domestic pump prices because government has no direct control over the setting of the bi-weekly prices of petroleum products;
3. However, being concerned about the impact of the upward trend of international market prices on domestic product prices, government has since December 2017 used upfront, the expected receipts from the Price Stabilisation and Recovery Levy (PSRL) in the price build-up as a mechanism to bring stability to prices;
4. Since 1st February, 2018, for instance, the PSRL which hitherto were GHp12/Lt on petrol and GHp10/Lt on diesel have been completely neutralized to reduce the impact of rising prices on the international market on Ghanaian consumers. This means that government has forfeited the revenue it would have collected on these products for the period 1st – 15th February, 2018 in order to cushion consumers;
5. This intervention by the government has brought down the expected increase of petrol’s price for the period 1st – 15th February, 2018 from 5.06% to 2.16% and from 3.60% to 1.26% for diesel;
6. Despite the expected increases above after the intervention, the actual price changes observed on the market at the moment range between 0.66% and 1.08%;
7. It is worthy to note that the large majority of Oil Marketing Companies (OMCs) still have their prices unchanged whilst some have even reduced their prices, and consumers are at liberty to purchase petroleum products from OMCs with competitive prices as expected under a price deregulated regime; and
8. The consuming public is hereby assured that the National Petroleum Authority will continue to monitor the prices of petroleum products on the market to ensure that they are set in conformity with the Prescribed Petroleum Price Formula.

We wish to advise all interested groups that need further clarity on the current state of petroleum product prices to contact the NPA for a discussion. This will ensure that the public is not misled by those who are motivated by reasons other than those of national interest.

Signed

Corporate Affairs Division

Source: Citifmonline