Ghana Fuel Prices: Energy Analyst Benjamin Nsiah Makes Case for Scrapping of Price Floor
Energy analyst Benjamin Nsiah makes the case to YEN.com.gh on why the current price floor for fuel needs to go
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Ghanaians are thinking more about the potential for cheaper fuel after calls by the StarOil CEO for the removal of the price floor.
While the idea sounds appealing, state actors like the National Petroleum Authority and the state-run GOIL fuel station have kicked against it.
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The price floor is intended to prevent predatory pricing by larger companies that prevents smaller companies from competing, and also provides predictability, counteracts smuggling, and reduces volatility in retail pricing.
The authority calculates a minimum price based on international import costs, fixed government taxes and levies and essential operational margins.
The current price floor is about 10 pesewas per litre below the cheapest price being provided by Oil Market Companies.
Philip Tieku, the CEO of StarOil, said his company could sell petrol for as low as 30 pesewas per litre below the current price floor.
There are concerns that the company could aggressively lower prices below competitors' cost structures and also start to pressure smaller fuel stations out of the market, ultimately reducing competition.
Despite the arguments in favour of a price floor, analysts like the Executive Director of the Centre for Environment and Sustainable Energy, Benjamin Nsiah, argued in favour of the StarOil CEO's call.
No benefits for smaller oil marketing companies
For starters, Nsiah does not think the price floor is benefiting the smaller oil marketing companies, as been argued.
The largest firms, on paper, are those that people are wary of abusing their market position by charging the least for fuel.
But the largest players, by brand size, stick to charging higher for fuel prices, despite the thinking that they would be most likely to abuse it.
In terms of sales volumes, as of August 2025, Energy News reported that StarOil’s volumes for diesel and petrol for the first half of the year stood at 399,491,400 litres, GOIL PLC at 327,264,000 litres, Shell at 249,148,700 litres, and TotalEnergies at 181,570,500.
GOIL is one of the leading OMCs by market share, but until recently, it has not provided competitive prices and is now in an open rivalry with StarOil in this regard, going as far as providing free food as a marketing tactic.
The top companies in Ghana by market share remain StarOil with a 15% of the market share and GOIL with about 13% as of late 2025.
GOIL's past pricing is an example of what Nsiah has been criticising.
For other big OMCs that have incredibly strong brand equity, Nsiah notes their goodwill has immense value to them, despite having lower market shares.
“Goodwill is an asset that sells. However, these OMCs are pricing higher because of the particular goodwill they are getting from their consumers.”
"The larger OMCs benefit from economies of scale, favourable siting and brand equity but don’t provide competitive prices for consumers."
Elaborating on the favourable citing, he noted the 17km road stretching from Accra Central to Madina, where there are no smaller fuel station brands sited.
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StarOil is an anomaly in this regard in that they do not have a presence on the most popular roads despite growing its business immensely.
"What the smaller OMCs do is set favourable prices because some of them are not sited within central business districts. They are not sited within vehicular population districts.”
According to the analyst, the smaller Oil Marketing Companies have instead bet on being efficient and having lower cost margins.
The danger of Ghana's fuel price floor
Nsiah posits that these smaller OMCs should get the allowance to set more favourable prices so they can compete against the softer advantages some of the larger OMCs have.
"That is why we should allow the market to set the prices so that when the market sets prices, if the smaller OMCs decide to set lower prices to attract consumers because of their weaknesses, so be it. If the bigger OMCs set prices because of their advantages, so be it.”
"Introducing an intervention in the market is going to kill the smaller OMCs and then save the bigger OMCs, and I think it is not fair for our petroleum downstream.”
He warned that the continued price floor would likely collapse most of the smaller OMCs.
Nsiah is concerned that with now more competitive prices, GOIL, with goodwill and favourable locations, will redirect traffic from these smaller OMCs.
He expected some pressure from citizens in the coming weeks to fight for the price floor to be removed.
Nsiah also argued that the fuel price floor goes contrary to the National Petroleum Authority Act and mandate, because in some sections of the Act, it states that there should be fair pricing that takes into consideration the interests of the consumer as well as the interests of the producer.
"In this case, in any market, a fair price is any price set by the market or established by the forces of demand and supply."
Proofreading by Bruce Douglas, copy editor at YEN.com.gh.
Source: YEN.com.gh
