The National Petroleum Authority (NPA) has said it trusts the Bulk Oil Distribution Companies (BDCs) to fairly price petroleum products.
The Authority’s Chief Executive Officer (CEO), Moses Asaga on the Citi Breakfast Show said although his outfit will no longer be involved in the pricing of petroleum products, it will still have an oversight responsibility.
“The NPA will still be a watch dog in the sense that NPA will still be monitoring international prices, NPA will be monitoring exchange rate movements and will also do its own calculation which will be a standard,” he explained.
[contextly_sidebar id=”z3xThNfbIuabecvzD2KkwwqQLzqUZmtO”]From June 15, the NPA will no longer be involved in the pricing of petroleum products.
This forms part of the full deregulation of the petroleum downstream sector.
The importers of the petroleum products – the BDCs and the suppliers of petroleum products will now bring in their products into the country at competitive prices and then sell to Oil Marketing Companies (OMCs) at competitive prices.
The OMCs will then pass on the prices to the retailers at the pump and make sure that they are competitive.
Since this announcement was made, concerns have been raised over this new policy in relation to timing, the pricing and the quality of products which will be sold to consumers.
However, Moses Asaga said the BDCs and OMCs cannot “collude” with the pricing of the products.
“I don’t think so…we are not saying at the beginning it’s going to be easy.”
He indicated that the NPA will be “collecting indicative prices from the OMCs which will then be published just like the banks will always publish their base rates.”
This, he said will help consumers know which of the OMCs have lower or higher prices and subsequently make a choice.
“We believe that when it stabilizes, competition can even bring down prices which will mean that government will no longer have the business of saying they want to subsidize because now it will be a private sector issue.”
Timing is key
Mr. Asaga defended the timing of the decision saying, the timing is right despite the various economic challenges facing the nation.
According to him, if the government decides to wait until all economic problems are fixed, this new policy will not see the light of day.
“Timing is important but if you are dealing with a developing country, then you will never take an important decision because always our timing will be wrong because when one aspect of the economy is improve, another aspect may not be improving,” he explained.
In relation to ensuring that only quality products are sold to the public, the NPA gave the assurance that over the years, it has compromised on quality due to the existence of the petroleum product marking scheme which is used to test petroleum products.
Asaga remarked that before this marking scheme was introduced, “the failure rate of dilution and adulteration was 34% but since two years ago when this was introduced, the failure rate to 5% and now if you ask the OMCs, we are doing about 2% so in terms of quality, we still continue to monitor.”
He admitted that although there might be attempts to bring in low quality, “…the NPA is now going to get a special unit made up of chemists, chemical engineers and analytical chemists to be part of the pre-inspection at the harbour before the discharge is made at the depot.”
The NPA boss disclosed that his outfit will engage Parliament on the new pricing regime.
He stressed that the new policy “should be a national issue because whether its NDC or NPP, none of these governments can sustain subsidies because…governments upon governments have been thinking this deregulation.”
By: Efua Idan Osam/citifmonline.com/Ghana