Business

Petroleum consumers kick against regional pricing policy

Fuel station

The Chamber of Petroleum Consumers Ghana has kicked against calls by some Oil Marketing Companies (OMCs) on the National Petroleum Authority (NPA) to implement zonal pricing programme that would allow OMCs to set different prices for petroleum products in different geographical locations.

The zonal pricing programme would promote a further deregulation of the petroleum industry where OMCs would not just adjust prices of petroleum products according to market  dictated prices, but the OMC’s would also have the authority to set different prices for petroleum in the outlets in the country.

For instance, petroleum products sold by Goil in the Greater Accra Region would be sold at different prices at other Goil outlets in other parts of the country, the difference will be largely influenced by the cost of transportation to the regions.

The call for further deregulation of the industry was made by Mr Henry Akwaboah, the Managing Director of Engen Ghana Limited.

He told the Ghana News Agency government needs to roll-out phase two of the deregulation process to allow OMCs fix prices based on geographical location.

But in an interview with Onua FM, the Executive Secretary of Chamber of Petroleum Consumers Ghana (CPCG), Duncan Amoah said though the zonal pricing programme is practised in the USA, the economic environment in the country would not be suitable for such a policy.

“Unfortunately, most people in the north would be paying higher prices for petrol and diesel due to the cost of transportation while those in the southern part will pay lower prices for petrol and diesel,” he said.

Mr. Amoah told Onua FM’s Abena Nyamekye, “we know that the people living in the northern part of the country are not economically well to do to pay for the high cost of petroleum that the zonal pricing regime will bring”.

Currently, OMCs, such as Goil and Shell quote the same prices at all their outlets in the country, this is made possible by the cross subsidy imposed on petroleum products allowing people living in the south to pay part of the added cost incurred to distribute petrol and diesel to outlets in far reaching parts of the country.

“If the zonal pricing regime policy is implemented by the NPA, those in the north could pay between 3 to 5 per cent more for petroleum than those in the south,” Amoah said.

According to him, the policy will also encourage rural-urban migration since people living in the hinterlands would be migrating to cities in the south of the country where petrol are cheaper.

“As the country is now, a zonal pricing policy will not be favorable to the Ghanaian consumer,” he said.

 

Nii Okai Tetteh Onua FM  | 3news             

 

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