President John Dramani Mahama's directive for government to absorb GH¢2 on every litre of diesel has been welcomed by the Chamber of Petroleum Consumers (COPEC) as a positive move. However, the organisation has cautioned against relying on short-term measures to manage fuel price increases.
Diesel Subsidy: A Necessary Intervention
The decision to focus specifically on diesel was influenced by the significant gap that had emerged between diesel and petrol prices. According to Duncan Amoah, COPEC Executive Secretary, while petrol prices were around GH¢14 to GH¢15 per litre, diesel prices had risen to about GH¢19 and were approaching GH¢20 per litre at some pumps.
This variance of almost four Ghana cedis was quite significant, Amoah noted. "A situation where the person driving a diesel engine is paying 19 Ghana cedis, approaching 20 Ghana cedis, whereas the one paying for petrol was paying about 14, 15 Ghana cedis," he said. Amoah welcomed the intervention, but cautioned that fuel subsidies could place pressure on government finances and should not become a permanent solution.
A Strategic Fuel Reserve System: The Way Forward
Amoah called for the establishment of a strategic fuel reserve system that would allow Ghana to purchase petroleum products when international prices are favourable and provide protection when global prices rise. Such a system would reduce Ghana's exposure to global fuel price volatility and help prevent sudden increases at the pump. Amoah argued that this system would provide a more sustainable solution to managing fuel price increases.
Oil Marketing Companies Respond
Some Oil Marketing Companies (OMCs) have already begun reducing prices ahead of the government's directive, which takes effect on Tuesday, August 4, 2026. Amoah mentioned Star Oil as one of the companies that had moved quickly to reduce diesel prices, describing the move as consumer-friendly. Star Oil's diesel price reduction brought the product down to about GH¢16.97 per litre, while petrol was selling at about GH¢14.53 per litre.
Increased Competition: A Key to Lower Prices
Amoah said increased competition among fuel retailers could help keep prices lower, especially for commercial drivers who had threatened fare increases following recent fuel price hikes. The intervention is expected to ease pressure on transport operators and commuters as government seeks to cushion consumers against rising petroleum prices.
However, Amoah warned that fuel subsidies could place pressure on government finances and should not become a permanent solution. He called for the establishment of a strategic fuel reserve system that would allow Ghana to purchase petroleum products when international prices are favourable and provide protection when global prices rise.
Source: Joy Online
