Ghana Fuel Price Update: NPA Raises Price Floor for February 16-28 Window

Key Update: Ghana’s National Petroleum Authority (NPA) has announced a new minimum price floor for petroleum products effective February 16 to 28, 2026. Petrol’s floor is now GH¢10.24 per liter, diesel is GH¢11.34 per liter, and LPG is GH¢9.43 per kilogram. This represents an increase from the previous window and mandates all Oil Marketing Companies (OMCs) and LPG Marketing Companies (LPGMCs) to sell at or above these rates.

Introduction: Understanding Ghana’s Fuel Price Floor Policy

For millions of Ghanaians and businesses reliant on transportation and energy, fuel prices are a critical economic indicator. In a move designed to stabilize the downstream petroleum sector, Ghana’s National Petroleum Authority (NPA) periodically adjusts a “price floor” – the minimum legal price at which fuel can be sold at the pump. This policy is a key component of the country’s Petroleum Products Pricing Guidelines. The latest adjustment for the second pricing window of February 2026 (February 16-28) has seen significant increases across all regulated products. This article provides a comprehensive, SEO-friendly breakdown of the new rates, the rationale behind the price floor mechanism, its implications for the downstream petroleum industry in Ghana, and practical advice for consumers and industry players.

Key Points: The New February 2026 Price Floors

The NPA’s circular, communicated through the Chamber of Oil Marketing Companies (COMAC), sets the following mandatory minimum ex-pump prices for the specified period:

• Petrol (Gasoline): Minimum ex-pump price floor set at GH¢10.24 per liter, up from GH¢9.99 in the first February window.
• Diesel (Gas Oil): Minimum ex-pump price floor set at GH¢11.34 per liter, increased from GH¢10.95.
• LPG (Liquefied Petroleum Gas): Minimum ex-pump price floor set at GH¢9.43 per kilogram.

Effective Period: These rates are effective from Monday, February 16, 2026, to Sunday, February 28, 2026.

Compliance Mandate: The directive explicitly prohibits any Oil Marketing Company (OMC) or LPG Marketing Company (LPGMC) from selling petroleum products below these stated floors. Companies currently selling below must adjust their pump prices upward to comply. This could lead to uniform price increases across many service stations, even those that had planned to maintain or lower prices due to competitive pressures.

Background: The Genesis of Ghana’s Petroleum Price Floor

The NPA’s Regulatory Framework

The National Petroleum Authority (NPA) is the statutory body responsible for regulating, overseeing, and monitoring the petroleum downstream sector in Ghana. Its operations are guided by the Petroleum (Downstream) Regulations, 2014 (L.I. 2174) and the associated Petroleum Products Pricing Guidelines.

Introduction of the Price Floor Mechanism (April 2024)

The formal implementation of a periodic price floor system began in April 2024. The NPA introduced this mechanism as a regulatory tool to address persistent and, in its view, “serious price undercutting” by some industry players. The core objectives stated by the Authority were:

• Prevent Price Distortions: To curb unsustainable price wars that could destabilize the market.
• Ensure Tactical Stability: To create a predictable operating environment for all participants in the downstream chain.
• Promote Fair Competition: To shift competition from solely price-based to include service quality, convenience, and safety.
• Protect Consumers & Investors: To prevent a “race to the bottom” that could compromise product quality, safety standards, and the long-term viability of OMCs.

How the Price Floor is Calculated

The NPA’s price floor is not arbitrary. It is derived from a formula that considers the following key cost components, as outlined in the Pricing Guidelines:

1. FOB Price: The international cost of the petroleum product (Free On Board).
2. Freight & Insurance: The cost of shipping the product to Ghana.
3. Port & Handling Charges: Costs at the Tema or Takoradi ports.
4. Storage & Evaporation Losses: Costs incurred by Bulk Import, Distribution and Export Companies (BIDECs).
5. Bank Charges & Financing Costs.
6. OMC/LPGMC Margin: A regulated, standardized operating margin for marketing companies.
7. Taxes & Levies: Including the Road Fund Levy, Energy Levy, etc.
8. Exchange Rate: The cedi’s value against the US dollar is a critical variable.

Important Clarification: The NPA’s published price floor excludes certain premiums charged by International Oil Trading Companies (IOTCs) and the specific running margins of BIDECs. These are determined independently by the respective entities. The Chamber of Oil Marketing Companies has consistently reminded members that the price floor is the absolute minimum; final pump prices can be higher based on these additional, market-determined costs and company-specific strategies.

Analysis: Implications of the February 2026 Adjustment

Market-Wide Impact: A Forced Alignment

The most immediate effect of a price floor increase is the elimination of sub-floor pricing. Any OMC previously engaged in aggressive discounting or operating on thinner margins to gain market share will be forced to raise prices to the new floor. This leads to:

• Reduced Price Disparity: A more standardized pump price landscape across compliant stations in the short term.
• Pressure on Low-Cost Operators: Companies whose business models relied on being the cheapest will face the greatest strategic challenge.
• Potential for Uniform Increases: Even competitors who had no intention of raising prices may now do so simply because the regulatory floor has moved up, removing their ability to undercut.

Stakeholder Perspectives: Support vs. Opposition

The policy has created a clear divide within the industry, highlighted by recent events at the Chamber of Oil Marketing Companies (COMAC).

The Pro-Floor Position (Majority of COMAC & NPA)

The majority of COMAC members and the NPA argue the price floor is essential for sectoral health. Their stance is that:

• The downstream sector was facing a “collapse” due to irrational pricing that did not reflect true costs.
• Unfair undercutting was eroding profit margins, jeopardizing the financial health of OMCs, and potentially leading to business failures and job losses.
• A stable, predictable pricing structure is better for long-term planning, investment, and maintaining quality standards than a volatile, cut-throat market.

The Anti-Floor Position (e.g., Star Oil)

Dissenting voices, such as Star Oil (which subsequently exited COMAC), contend that:

• The price floor is anti-competitive and removes the ability to compete on price, which is a fundamental market principle.
• It protects inefficient operators at the expense of more efficient ones who can offer lower prices.
• It reduces consumer choice and may lead to higher prices than the market would naturally bear, especially if the calculated floor is above the equilibrium price.
• It limits entrepreneurial flexibility in responding to local market dynamics and promotional strategies.

Consumer and Economic Considerations

For the average Ghanaian consumer, the direct impact is a likely increase in the price paid at the pump, as the new floor is higher than the previous one. The NPA’s argument is that this ensures a “sustainable” downstream sector, which in the long run prevents more severe disruptions (like station closures) that would cause greater hardship. However, critics argue it removes short-term relief from high international oil prices. The policy’s ultimate effect on inflation and transport costs depends on how closely the ex-pump price follows the floor and whether the floor itself accurately reflects international trends and the cedi’s exchange rate.

Practical Advice: What This Means For You

For Vehicle Owners and Transport Operators

• Budget Adjustment: Factor in the increase of GH¢0.25 for petrol and GH¢0.39 for diesel per liter compared to the previous window’s floor when planning your monthly transport or logistics budget.
• Price Monitoring: While the floor is the minimum, some OMCs may still add their premiums and margins, leading to prices above the floor. Shop around, but understand the floor is the baseline.
• Fuel Efficiency: This is a timely reminder to adopt fuel-efficient driving habits and ensure vehicle maintenance to mitigate the impact of fuel costs.

For Businesses and Fleet Managers

• Contract Reviews: If you have fixed-price contracts for fuel or transportation services, review them to understand who bears the risk of price increases.
• Cost Pass-Through: Businesses that rely on fuel (logistics, delivery, public transport) may need to consider adjusting service fees or product prices to cover increased operational costs.
• Operational Efficiency: Investigate route optimization, vehicle pooling, or alternative energy sources where feasible to reduce diesel/petrol dependency.

For Oil Marketing Companies (OMCs) and LPGMCs

• Immediate Compliance: Ensure all pump prices are updated to meet or exceed the new GH¢10.24 (petrol) and GH¢11.34 (diesel) floors by February 16, 2026. Failure to comply can result in sanctions from the NPA.
• Transparent Pricing: Clearly display final ex-pump prices. Be prepared to explain to customers that the NPA’s price floor has increased, which sets the new baseline cost.
• Strategic Review: Re-evaluate business models. With price competition limited at the floor, competition on service quality, loyalty programs, convenience store offerings, and safety becomes paramount.
• Cost Management: Scrutinize all other operational costs (BIDEC margins, IOTC premiums, overheads) to maintain profitability within the constrained pricing environment.

FAQ: Frequently Asked Questions on the Fuel Price Floor

What exactly is a “price floor” for fuel?

A price floor is a government-mandated minimum price below which a product cannot be sold. In Ghana’s context, the NPA sets a minimum ex-pump price (the price at the service station before any retailer discounts or promotions). OMCs must sell at or above this price. It is a price control mechanism aimed at preventing destructive price wars.

How often does the NPA change the price floor?

The NPA reviews and sets the price floor for bi-monthly pricing windows. Typically, there are two windows per month. The announcement for the upcoming window (e.g., February 16-28) is made a few days before its effective date. The rate can be adjusted up or down based on the formula’s inputs: international oil prices, the cedi-dollar exchange rate, and other statutory levies.

Is the price floor the same as the pump price I will pay?

Not necessarily. The price floor is the absolute minimum. The final pump price you see can be higher. OMCs add their own operating margins, and some may include premiums from their international suppliers. The NPA’s floor covers the basic cost components and a standard OMC margin. Any price above the floor is a business decision by the individual OMC.

What happens if an OMC sells below the price floor?

Selling below the NPA’s mandated price floor is a violation of the Petroleum Products Pricing Guidelines. The NPA has enforcement powers and can impose sanctions on defaulting companies, which may include fines, suspension of operations, or revocation of licenses. The Chamber of Oil Marketing Companies (COMAC) also advocates for strict compliance among its members to maintain market order.

Why did the NPA introduce this policy?

The NPA states the policy was introduced in April 2024 to combat “serious price undercutting” that it believed was distorting the market, threatening the viability of OMCs, and potentially compromising service quality and safety standards. The goal is to ensure a tactically stable and sustainable downstream petroleum sector.

Does this policy benefit consumers?

This is debated. Proponents argue that long-term sector stability prevents station closures and ensures consistent supply, which ultimately protects consumers. They also argue that with price competition shifted to service, consumers may benefit in non-monetary ways. Critics argue it removes competitive pricing, potentially leading to permanently higher prices and reduced consumer choice, especially when the floor is set above what a free market might bear.

Can the price floor ever decrease?

Yes. The price floor is formula-driven. If international crude oil prices fall significantly, the cedi stabilizes or appreciates against the dollar, and other cost components decrease, the NPA can set a lower price floor in a subsequent window. The February 2026 window saw an increase, but previous windows may have had different movements based on market conditions.

Conclusion: Navigating a Regulated Fuel Market

The NPA’s adjustment of the fuel price floor for February 16-28, 2026, to GH¢10.24 for petrol and GH¢11.34 for diesel