COMAC renews call for full deregulation of fuel prices

The Chamber of Oil Marketing Companies (COMAC) has renewed calls for the full deregulation of fuel prices, arguing that continued government intervention is affecting the operations of private businesses in the downstream petroleum sector.

The call comes as government continues to subsidise diesel amid rising global oil prices, cushioning consumers from part of the impact of higher international petroleum costs.

Chief Executive Officer of COMAC, Dr Riverson Oppong, said the industry cannot be described as fully deregulated when government continues to influence parts of the fuel pricing structure.

“This is an industry where we have pushed for a full price deregulation policy,” he said.

Dr Oppong questioned why the government should determine the prices private businesses charge when companies operate in a free market and rely on borrowed funds to finance their operations.

“If I’m a private business, I borrow money to run the business. Who is going to determine what I charge for my good, a ceiling, a cap and all those things because we are a free market economy,” he said.

He explained that while some components of the pricing formula have been deregulated, government interventions remain.

“There are aspects of the pricing price builder today that are not fully deregulated,” he said.

“For sure, I can say that the margins of some components of the SREF are kind of deregulated, but we still have government interventions. That’s why the government can say it’s giving subsidies.”

Dr Oppong said government interference remains one of the biggest challenges facing oil marketing companies.

“I’m also tempted to say that we do have too much government interference, and for me, ever since I took this position, it’s been one of the biggest challenges to deal with. That is government intervention,” he said.

He also questioned the continued entry of new players into an industry already crowded with oil marketing companies.

“If anybody today has applied for an oil marketing company’s license, then the person, indeed, for two reasons, and I’ll say it, I mean, unapologetically, that the person either does not understand the business, or is up to something, because what is it that you want to do that the 245 players cannot do?” he said.

Dr Oppong maintained that a fully deregulated market would allow private sector operators to determine prices without excessive government intervention.

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