By Cecil Mensah
The Ghana Chamber of Bulk Oil Distributors (CBOD), umbrella body of Bulk Oil Distributing Companies (BDCs), has rolled out a pricing formula that would periodically publish the prevailing market prices of fuel products in conformity with international standards in the country.
According to CBOD, the periodic publication of the Ex-Refinery Price Indicators (XPi), Oil Traders Index (OTi) and Fuel Forex Rate (FUFex30) which are the estimated ex-refinery price at which the various BDCs will sell petroleum products to the Oil Marketing Companies (OMCs), will reduce cartelization.
The formula is also a public interest service being offered by the chamber, following the price liberalization of the petroleum downstream sector.
The formula is aimed at empowering the public with information about petroleum pricing and trends for them to make inform decisions when purchasing petroleum products.
Speaking at the launch of the pricing formula in Accra, Chief Executive Officer of CBOD, Mr Senyo Horsi , said the formula was computed using the referenced world market prices as observed to be usually adopted by BDCs ,factoring supplies premium per levels approved under the regulated pricing regime and converted into Ghana Cedis using the referenced foreign exchange rate.
He intimated that this formula is a 30-day forward forex rate computed using the covered interest parity model adjusted by the Ghana Sovereign Bond using an average US Dollar selling spot rate of five major oil financing banks.
The launch was attended by Dr Charles Wereko Brobbey, former CEO of Volta River Authority (VRA), president of Imani Ghana, Franklin Cudjoe, Dr Mohamed Amin Anta, president of African Centre for Energy Policy (ACEP) and officials of the National Petroleum Authority (NPA).
Launching the formula, Dr Wreko-Brobbey stressed that the days where government say they care for the electorate and reduce prices of fuel even when the world market price was high, will be a practice of the past.
He said, there shall be no government mercies in the pricing of fuel and challenged the BDCs to operate independently and withstand pressures from the government.
He said, using the formula set up by the BDCs, prices will now be reviewed every week to reflect the changes in the exchange rate and at the pump.
He noted the formula would provide civil society organizations, the opportunity to monitor the activities of OMCs.
He commended the CBOD and the industry stakeholders for the initiative to provide a service that will curtail cartelization of fuel pricing.
Dr Mohamed Amin Anta, said the formula would afford customers the option to choose where to buy their fuel products, depending on the prices put out by the OMCs.
He said, after the formula was fully operational and OMCs put same prices at the pump across board then NPA, the regulatory body must crack the whip on them for engaging in cartelization.