Accra, Ghana – January 22, 2026 – The Centre for Environmental Management and Sustainable Energy (CEMSE) has raised concerns over the National Petroleum Authority’s (NPA) petroleum price floor, arguing that the policy undermines market efficiency, stifles competition, and ultimately hurts consumers.
Introduced in April 2024, the price floor sets a minimum retail price for petroleum products that oil marketing companies (OMCs) and liquefied petroleum gas (LPG) marketers cannot undercut. While the policy aims to prevent “unhealthy competition” and maintain market stability, CEMSE says it has had the opposite effect.
Challenging the Predatory Pricing Justification
One of the main justifications for the price floor is to prevent predatory pricing, where larger firms temporarily slash prices to push competitors out of the market. However, CEMSE argues that this is largely irrelevant in Ghana’s downstream sector, which is highly homogeneous with low barriers to entry. According to the think tank, lower prices in the market are more likely the result of operational efficiency or competitive strategies rather than attempts to monopolize.
Smaller and peripheral brands like Star Oil, Zen Petroleum, Allied, and Benab use competitive pricing to attract customers, particularly outside central business districts, keeping overall market prices in check. By imposing a floor, CEMSE says, inefficient retailers survive without improving operations, while efficient operators are penalized for their competitiveness.
Competition and Innovation at Risk
CEMSE warns that price floors reduce incentives for efficiency, innovation, and customer service improvements. Drawing on global evidence, the think tank highlights that such policies tend to homogenize prices, discourage investment in cost-reducing technologies, and stifle innovation.
Low-cost players such as EV Oil and Trugreen Petroleum, which sell gasoline below GHS 10 per litre, risk being pushed out if the price floor remains, reducing market diversity and consumer choice. Over time, this can entrench an oligopoly where prices are unresponsive to supply, demand, or external shocks.
Consumers Lose Out
While the NPA maintains that the price floor benefits consumers by ensuring predictability and balanced pricing, CEMSE argues that the policy keeps prices artificially high, especially when global fuel prices fall. This disproportionately affects low-income households, who are forced to subsidize inefficient retailers.
A Call for Market-Driven Solutions
CEMSE advocates for a petroleum retail market driven by fair competition rather than rigid price controls. The think tank recommends that regulators:
Suspend the price floor and conduct an independent, time-bound review to determine whether systemic predatory pricing truly exists.
Redirect regulatory focus toward policing genuine anti-competitive practices such as under-delivery, adulteration, and illegal price manipulation, rather than penalizing competitive pricing.
The centre argues that promoting transparency, fair access to distribution networks, and efficiency-based competition will benefit consumers, encourage innovation, and strengthen the long-term sustainability of Ghana’s downstream petroleum sector.
Conclusion
CEMSE concludes that while the NPA’s price floor was well-intentioned, it misinterprets aggressive competition as predatory behavior. For the downstream petroleum sector to thrive, the focus must shift to fostering competition, efficiency, and consumer welfare, rather than constraining market forces.