Three things drive fuel prices – NPA boss names the forces behind Ghana’s pump prices

The CEO of Ghana's National Petroleum Authority (NPA), Godwin Edudzi Tamakloe, has pinpointed three key elements that influence the availability and cost of petroleum products in the country. Mr Tamakloe highlighted the international Free on Board (FOB) price, taxes, and the exchange rate as the primary drivers of fuel prices in Ghana. His remarks were made in response to ongoing challenges faced by Ghana's downstream petroleum sector due to external pressures impacting pump prices.

During an appearance on Joy News' PM Express Business Edition, Mr Tamakloe emphasized the complexity of managing Ghana's petroleum sector, stating that the country's exposure to global market fluctuations makes the task particularly demanding. He explained that the NPA's role involves balancing management of domestic factors with vigilance towards external developments that could sway the industry.

Mr Tamakloe also recalled the severe fuel shortages and long queues experienced in Ghana around 2014 and 2015. He clarified that those shortages were not caused by a scarcity of petroleum products but were artificially induced, leading to queues at the pumps. He underscored the critical nature of petroleum products to Ghana’s economy and national security, noting that they are so essential that consumers have no feasible alternatives when supplies are disrupted.

The NPA's strategy involves controlling domestic factors while staying vigilant to external market shifts that could influence the sector. Mr Tamakloe stressed that petroleum is central to Ghana's economy, comparing the downstream sector to the "nervous system" of the entire economy. He pointed out that managing the sector necessitates taking into account both external market conditions and internal factors that are within the NPA's control.

He concluded by stating that three principal elements primarily impact on the availability and pricing of petroleum products: the FOB price, tax components, and the exchange rate, all of which remain crucial considerations for Ghanaian consumers as they observe fluctuations at the pump.