Country Director for CUTS Ghana, Appiah Kusi Adomako, has called on the Association of Oil Marketing Companies (AOMCs) to desist from determining the margin of reduction for fuel prices at the various pumps across the country.
According to him, this act violates Section 44 of the National Petroleum Authority Act 691 of 2005.
Following a drop in global crude oil prices and the relative stability of the cedi for about two months now, there have been calls by the Chamber of Petroleum Consumers and other interest groups for the OMCs to reduce their prices in line with the petroleum product pricing and deregulation policy.
But speaking in an interview as part of activities to mark World Consumer Rights Day, he said, “with the emergence of price deregulation, one would expect consumers to feel the impact of the fall in the crude oil prices coupled with the appreciation of the Ghanaian cedi against the US dollar, however, the concerted effort by the AOMCs to agree on an average percentage price reduction and the deferring the time for such a reduction constitutes a price-fixing which is an offence under sub-section 3 of Section 44 which states that a person who commits an offence under this section is liable on summary conviction to a term of imprisonment not exceeding ten years or to a fine not exceeding fifteen thousand penalty units calculated in a currency determined by the Minister, or to both.”
He also urged the Association to put an end to the act as it aids in the cartelization in the petroleum downstream industry.
“Section 43 prohibits the formation of cartels or anything behaviour that seeks to lessen competition in the petroleum downstream market,” said Appiah Kusi Adomako, the Country Director CUTS Ghana,” he noted.
He further noted that “the statement by the Chief Executive Officer of the Association of Oil Marketing Companies (AOMCs) Kwaku Agyeman Duah that consumers of petroleum products should not expect a drastic reduction of the commodity this week in itself is a clear indication that the association is having a horizontal and concerted action on pricing which violates the essence of free market and competition rules as contained in the NPA Act.”
World Price Slump
On Monday, March 9, 2020, oil prices saw its lowest drop since 1991, after Saudi Arabia started a price war with Russia by slashing its selling prices and pledging to unleash its pent-up supply onto a market reeling from falling demand because of the coronavirus outbreak.
Prior to this huge slash, crude prices had been relatively stable. By this, prices are generally expected to go down significantly at the pumps, to ease pressure on consumers.
Brent crude futures fell by as much as $14.25, or 31.5%, to $31.02 a barrel. That was the biggest percentage drop since Jan. 17, 1991, at the start of the first Gulf War and the lowest since February 12, 2016. It was trading at $35.75 at 0114 GMT.
