Dr. Riverson Oppong, CEO of the Chamber of Oil Marketing Companies (COMAC), has expressed concerns over government intervention in Ghana's fuel pricing regime. He argues that the sector should be allowed to operate under full price deregulation, as companies operating in the sector are private businesses that raise their own funds to operate. According to Dr. Oppong, the oil marketing industry has consistently pushed for full deregulation.
Dr. Oppong questioned why the government should have a role in determining how private businesses price their products in a free-market economy. He noted that if he is a private business, he borrows money to run the business, and it is not the government's role to determine what he charges for his goods. Dr. Oppong acknowledged that some components of the pricing structure have been deregulated, but government interventions remain in the system.
The COMAC boss cited government subsidies on fuel as evidence of continued intervention in the sector. He stated that the government's decision to subsidize fuel is a clear indication of its role in determining fuel prices. Dr. Oppong also mentioned that government interference has become one of the biggest challenges he has faced since taking over his current position.
Dr. Oppong further questioned the continued expansion of the oil marketing sector, arguing that the existing number of players is already substantial. He stated that if anybody has applied for an oil marketing company's license, it is either because they do not understand the business or are up to something. Dr. Oppong asked what additional role new players would play that the existing 245 players cannot fulfill.
According to Dr. Oppong, the government's role in determining fuel prices has led to challenges in the industry. He noted that the margins of some components of the SREF are kind of deregulated, but government interventions still exist. The COMAC boss emphasized that the industry needs full deregulation to operate efficiently.
Dr. Oppong's comments come as the government continues to subsidize diesel amid rising international oil prices. The government's interventions in the pricing structure remain a key feature of the downstream petroleum market. The COMAC boss's call for full deregulation is aimed at allowing the industry to operate freely and make decisions without government interference.
The Chamber of Oil Marketing Companies has consistently pushed for full deregulation of the fuel pricing regime. The industry players believe that full deregulation will allow them to operate efficiently and make decisions without government interference. The government's response to the COMAC boss's comments and the industry's push for full deregulation remains to be seen.
Key points
- COMAC CEO Dr. Riverson Oppong calls for full deregulation of Ghana's fuel pricing regime.
- Government interventions in fuel pricing have become a challenge for the industry.
- The existing number of players in the oil marketing sector is substantial, making further expansion questionable.
