ACEP dismayed by NPA’s decision to set price floor for petroleum products

The African Center for Energy Policy (ACEP) has expressed its dismay at the National Petroleum Authority (NPA)’s recent decision to establish a “floor” for the pricing of petroleum products.

ACEP contends that this action falls beyond the purview of the NPA’s mandate and therefore constitutes an illegal measure.

The NPA’s decision aims to prevent any industry participant, including Oil Marketing Companies (OMCs) and Liquefied Petroleum Gas Marketing (LPGMC) Firms, from pricing below the established benchmark.https://drive.google.com/file/d/17jNbONvpWm1-YduOY4myO6OmPJp8b8bH/preview

Implemented as part of the Amended Pricing Guidelines introduced by the National Petroleum Authority, this regulation took effect on Monday, April 1.

In a letter addressed to industry stakeholders and signed by the Deputy Chief Executive of the National Petroleum Authority, Curtis Perry Okudzato, on behalf of the CEO of NPA, all Petroleum Service Providers were urged to strictly adhere to these guidelines.

The rationale behind this move, as stated by the NPA, is to address concerns raised by industry players regarding significant price undercutting by certain oil marketing companies in the country.

The National Petroleum Authority further pledged to periodically provide Petroleum Service Providers with comprehensive pricing formulas detailing specific taxes, levies, and margins applicable for each pricing window in Excel format.

However, ACEP, in a press release issued on Thursday, April 4, has called on the NPA to rescind the decision promptly.

“ACEP is dismayed by the National Petroleum Authority’s (NPA) recent directive introducing price floors for the downstream petroleum sector. The directive is expressly outside the plethora of functional activities prescribed by the NPA Act (Act 691), 2005.”

“ACEP asserts that most of the legally mandated functions of NPA are outdated in the current deregulated market context yet sustained by political settlement to levy petroleum consumers and the industry unnecessarily.”

source: myjoyonline

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