Chief Executive Officer of National Petroleum Authority (NPA), Mr. Moses Asaga, has dismissed claims by the Member of Parliament (MP) for the Adansi Asokwa Constituency Hon. Kwabena Tahiru Hammond, that the downstream petroleum pricing has not been liberalised.
Consequently Mr. Asaga has challenged the MP to proceed to court if he feels the authority has breached any law in its implementation of the de-regulation regime.
The Adansi Asokwa MP is insisting that the NPA still has a hand in determining the prices of petroleum products contrary to the claims of the authority that that function has been ceded to the Bulk Distribution Companies (BDCs) and the Oil Marketing Companies (OMCs).
In an interview with Citi FM’s Richard Dela Sky, Mr. K.T Hammond maintained that downstream petroleum pricing has not been deregulated.
“There is no price liberalisation going on at the moment…we hear people talk about deregulation….the oil petroleum market has not, Richard read my lips, has not been deregulated, that is not the case,” he asserted.
According to him, the NPP administration set the tone to liberalise petroleum pricing but stopped half way due to a number of reasons.
He noted that the NPA Act promulgated in 2005 and the Legal Instrument (LI) 2186 empowers the NPA as the sole entity to determine prices of petroleum products in Ghana and that the authority is dutifully sticking to that mandate and that any claim to act contrary would have been unlawful.
The MP who doubles as the minority spokesperson on energy said he was on the verge of going to the law court over the matter but realised the NPA is still in charge of setting prices hence his decision not to proceed with the court action.
“Indeed NPA is setting prices as I am speaking to you today,” he intimated.
Moses Asaga is Director at the National Petroleum Authority (NPA)
However, he said what the Authority has not been doing is to gazette the pricing and thereby creating the impression that it was no longer in charge.
He explained the NPA sets the ceiling within which the OMCs and BDCs can operate, therefore whoever claims that the pricing regime has been deregulated does not know what he or she is talking about.
Mr. Hammond said it is therefore an absolute lie to say the BDCs and OMCs determine prices.
“They are lying trough their teeth. They have lied to everyone, they have lied to the general public,” he averred.
The MP said the International Monetary Fund (IMF) has warned the government to keep its hands off the pricing policy but government has realised there is nothing it can do since the laws regulating NPA’s activities have not been amended.
He said there is nothing they (government and NPA) can do except to hide “behind the skirt of deregulation and liberalization.”
This, he explained, was the reason the NPA was no longer publishing the prices reviews even though the entity is still setting the ceiling for the BDCs and OMCs to follow.
He thought it was not possible for the BDCs and OMCs to price their products outside the NPA’s approved rates and argued that the NPA was responsible for the recent reduction of between 10-15%.
But the CEO of NPA, Moses Asaga, had accused Mr. K.T Hammond of misleading the public vowing the OMCs are pricing their products because the Authority is implementing a liberalised regime.
He said with the new de-regulation the BDCs and OMCs are required to set prices and submit same to the NPA whiles the authority monitors to ensure prices remain within the indicative prices.
He said Ghanaians want to know whether or not they were being cheated under the new order and that the NPA’s role is to act as the police man who sets the standard for the OMCs.
He said where an OMC goes above the indicative price, the NPA will call that organisation to order.
“We are in a de-regulation and the de-regulation means prices are changing and people must compete,” he stated, saying that practically the liberalisation was taking place as prices keep changing.
As far as he was concerned the NPA has not broken any law by de-regulating, explaining that whiles the NPA Act is being reviewed, there was a transition window that allowed the authority to carry through with the de-regulation.
He said de-regulation was a process and the NPA ACT 2005 emphasized a step by step approach and that was being followed.
He indicated that there was nothing secretive about the pricing formula being used by the BDCs and OMCs and that the formula and quotations had been submitted to Parliament as well as the proposed amendment.
He said for now due to the nature of the oil market, deregulation cannot wait for the review to be completed.
When asked what was the basis for the prices determined by the BDCs and OMCs, Mr. Asaga mentioned factors such as the FOB, freight, taxes among others.
The NPA boss also dismissed assertions by the Africa Centre for Energy Policy (ACEP) that the OMCs were short-changing customers, following the review in prices last week.
In ACEP’s estimation prices should have been reduced between 23 and 25% for petrol and diesel respectively based on the reduction in the ex-refinery price indicator (XPI).
Subsequently the ACEP indicated it would drag the BDCs and OMCs to the law court to seek further downward price review.
But Mr. Asaga challenged ACEP boss, Dr. Mohammed Amin Adam, to make public the formula his organisation used in arriving at the 23 and 25% reduction margins.
“Amin is not the authority. Let Amin bring his pricing formula, let him come with his FOB prices, suppliers premium,” said Mr. Asaga.
He challenged the ACEP boss to submit the parameters he used in his computation.
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