The National Petroleum Authority (NPA) has introduced a new price floor for the second pricing window, effective from 16 to 31 October 2024.

The authority has set a minimum price of GH₵12.73 per litre for petrol and GH₵13.43 per litre for diesel.

This move means that no Oil Marketing Company (OMC) will be allowed to sell below these prices.

In a notice to OMCs and Liquefied Petroleum Gas (LPG) marketers, the NPA urged all industry players to comply with the new price floors during the specified window.

The NPA clarified that the set price floors do not include premiums charged by International Oil Trading Companies (IOTCs), the operating margins of Bulk Import, Distribution and Export Companies (BIDECs), or the Marketers’ and Dealers’ Margins for OMCs and LPG marketers.

These will be determined independently by the companies, in line with the country’s Price Deregulation Policy.

The introduction of the price floor mechanism is aimed at preventing price undercutting in the industry, which the NPA has warned could threaten its stability if left unchecked.

However, the NPA recently suspended the Price Floor programme for Bulk Oil Distribution Companies (BDCs) following concerns raised by stakeholders in that sector.

Despite this, the price floor remains in place for OMCs.

The programme has faced some criticism, with some industry players arguing that it contradicts free market principles.

Nonetheless, the NPA maintains that the policy was implemented after consultations with industry stakeholders and is designed to address the challenges of price undercutting in the sector.