IES backs NPA price floor, questions StarOil’s cheap fuel claims

The Institute for Energy Security (IES) has mounted a strong defence of the National Petroleum Authority’s (NPA) price floor policy, describing it as a critical safeguard for fair competition and long-term stability in Ghana’s deregulated petroleum downstream sector.

In a statement issued on Monday, January 19, 2026, the IES responded to recent public comments by the Chief Executive Officer of StarOil Ghana, who suggested that the NPA’s price floor regime prevents the company from selling petrol at significantly lower prices, including claims that fuel could be sold at GHS 9.50 per litre during off-peak night hours if the policy were removed.

The remarks have generated widespread public debate and reactions on social media. While welcoming public engagement on fuel pricing, the Institute cautioned that such discussions must be grounded in sound market principles and a clear understanding of regulatory realities.

“The petroleum downstream market is capital-intensive, high-risk, and highly exposed to global price volatility and exchange rate fluctuations. The NPA price floor was introduced as a competition-stabilizing mechanism, not as a price-fixing tool,” the statement noted

According to IES, the policy plays a vital role in preventing predatory pricing by dominant or well-capitalised oil marketing companies (OMCs), protecting smaller and emerging players from being forced out of the market, and ensuring healthy competition and supply continuity, particularly during periods of tight margins.

The IES warned that international experience shows unregulated price wars in fuel markets often lead to monopolisation, supply disruptions, and, ultimately, higher prices for consumers.

It also raised concerns about the suggestion that fuel prices could be selectively reduced during specific hours, arguing that fuel retailing does not operate like a digital service where marginal costs disappear at night.

“Storage, financing, distribution, and inventory risks remain constant, regardless of the time of day,” the Institute explained.

The statement questioned the sustainability of selling fuel below the regulatory floor, asking whether such prices reflect true economic costs, whether losses are being cross-subsidised to crowd out competitors, and what would happen to prices once smaller players exit the market.

“These are precisely the market failures the price floor is designed to prevent,” the IES stressed.

The Institute also pointed to reactions from other industry players, including GOIL Ghana, whose Group CEO has publicly challenged StarOil’s claims, noting that some companies calling for lower prices are unable to compete even at the approved floor price of GHS 9.80 per litre in the current pricing window.

“This divergence between industry realities and public-facing narratives underscores the danger of oversimplifying fuel pricing dynamics for social media appeal,” the statement said.

Raising broader regulatory concerns, the IES questioned whether calls for the removal of the price floor would have emerged if StarOil were not currently a market leader, warning against what it described as regulatory opportunism rather than genuine consumer advocacy.

In light of the claims made, the Institute has formally called on the NPA to investigate StarOil’s pricing assertions and cost structures, assess compliance with existing regulations, examine any potential attempts at predatory pricing, and reaffirm the principles underpinning the price floor regime.

“Regulation must be evidence-based, transparent, and enforced uniformly, particularly in markets that directly affect national economic stability and household welfare,” the IES stated.

IES further urged that the fuel pricing debate move beyond headline-grabbing statements to serious engagement with market economics, competition policy, and long-term consumer protection, emphasising that short-term price cuts that undermine market structure are not pro-consumer in the long run.