Crude Oil Price Floor Was Created to Protect Multinational OMCs – Bernard Nsiah

The Executive Director for the Center for Environmental Management and Sustainable Energy (CEMSE), Mr. Bernard Nsiah is of the view that the price floor imposed on the oil marketing companies in Ghana by the NPA is a deliberate attempt to protect multinational oil marketing companies like GOIL, SHELL and TOTAL from competition. He made these claims while speaking with Kessben FM’s Kojo Preko Dankwah via zoom on Kessben Maakye.

According to Mr. Nsiah, before the introduction of the price floor, the multinational companies were facing serious competition from indigenous companies like Star Oil, Zen and Alinco, amongst others. This was because the market was competitive and the indigenous private companies were using reduced prices as a strategy to attract customers. Setting a price floor in this regard will only go a long way to hurt the final consumer since they will be deprived of the ability to choose.

He said, “Star Oil and other indigenous companies have showed us that competition is the way to go and hence there is no need for regulation. The moment you introduce price floors, it means you want to regulate the market and that is not right.”

Mr Bernard Nsiah further cautioned the NPA to allow companies within the industry to create their own strategies to attract customers and allow the forces of demand and supply to determine prices, stating that the price floor is unfair to companies, especially the indigenous ones who only can only attract customers with competitive prices.

He said, “most of these indigenous private companies located in urban areas are perceived to sell low quality fuel, which is not true. The only way they can attract customers and stay in business is to reduce prices and practice price variation.”