IES Defends NPA Price Floor, Says its Meant to Safeguard Fair Competition
The Institute for Energy Security (IES) has defended the National Petroleum Authority’s (NPA) fuel price floor policy, describing it as a critical safeguard for fair competition and long-term stability in Ghana’s downstream petroleum market.
In a press release dated January 19, 2026, the energy policy think tank said recent claims by the Chief Executive Officer of StarOil Ghana — that the company could sell petrol at GHS9.50 per litre during off-peak night hours if not for the price floor — risk oversimplifying fuel pricing dynamics and misleading the public.
The comments, which have triggered widespread debate on social media, suggest that the NPA’s pricing regime is preventing cheaper fuel for consumers. However, IES argued that while public engagement on energy pricing is welcome, discussions must be grounded in market economics and regulatory realities.
“The petroleum downstream market is capital-intensive, high-risk, and highly exposed to global price volatility and exchange rate fluctuations,” IES stated, stressing that the price floor is not a price-fixing tool but a competition-stabilising mechanism.
According to the Institute, the policy is designed to prevent predatory pricing by dominant players, protect small and emerging Oil Marketing Companies (OMCs), preserve healthy competition, guarantee supply continuity during periods of tight margins, and promote long-term consumer welfare rather than short-term price cuts.
IES warned that unregulated price wars in fuel markets, based on international experience, often lead to monopolisation, supply disruptions, and ultimately higher prices for consumers.
The Institute also raised regulatory concerns about the suggestion that fuel prices could be selectively reduced during specific hours, such as between 10pm and 4am.
“Fuel retailing is not a digital service where marginal costs disappear at night. Storage, financing, distribution, and inventory risks remain constant,” the statement noted.
IES questioned whether prices below the regulatory floor would be economically sustainable, whether losses could be cross-subsidised to crowd out competitors, and what the long-term implications would be for smaller OMCs and market competition.
It further pointed to pushback from industry players, including GOIL Ghana, whose Group CEO has publicly challenged StarOil’s claims, noting that some companies advocating lower prices are unable to compete even at the approved floor price of GHS9.80 per litre in the current pricing window.
“This divergence between industry realities and public-facing narratives underscores the danger of oversimplifying fuel pricing dynamics for social media appeal,” IES said.
The Institute questioned the timing and motivation behind calls to remove the price floor, asking whether such demands would have emerged if StarOil were not currently a market leader.
“Historically, price floors and similar regulatory protections are what enabled many OMCs — large and small — to survive intense competition, build scale, and invest in infrastructure,” the statement added.
Given the gravity of the public claims, IES has called on the NPA to investigate StarOil’s pricing assertions and cost structures, assess compliance with existing pricing regulations, examine any potential predatory pricing practices, and reaffirm the principles underpinning the price floor regime.
“Regulation must be evidence-based, transparent, and enforced uniformly, particularly in markets that directly affect national economic stability and household welfare,” IES said.
The Institute cautioned that short-term price reductions that undermine market structure are not pro-consumer in the long run, adding that the debate on fuel pricing should move beyond headline-grabbing statements to serious engagement with competition policy and long-term consumer protection.
IES reaffirmed its commitment to supporting policies that promote fair competition, energy security, and sustainable consumer welfare in Ghana’s petroleum downstream sector.
