Petrol, LPG price floors decrease but diesel increases in 2nd August window

Price floors for petrol and Liquefied Petroleum Gas (LPG) have declined for the second pricing window of August, while diesel has recorded a marginal increase.

This is according to the latest figures from the National Petroleum Authority (NPA) .

The petrol price floor has been reduced by GH¢0.61 per litre or 4.2%, from GH¢14.53 in the first pricing window of August to GH¢13.92 per litre in the second window.

For LPG, the price floor has also fallen by GH¢0.08 per kilogram or about 0.7%, from GH¢11.06 to GH¢10.98 per kilogram.

Diesel, however, is moving in the opposite direction. Its price floor has increased by GH¢0.22 per litre or 1.5%, from GH¢14.97 in the first pricing window to GH¢15.19 per litre in the second window.

The changes mean consumers could see some downward pressure on petrol and LPG prices at the pumps, although the actual retail prices will depend on the margins and other charges applied by individual petroleum companies.

Price floors represent the minimum thresholds below which Oil Marketing Companies (OMCs) and LPG Marketing Companies (LPGMCs) are expected not to retail the products during a pricing window.

Under the Petroleum Product Pricing Guidelines (PPPG), the floors exclude premiums charged by International Oil Trading Companies (IOTCs), operating margins of Bulk Import, Distribution and Export Companies (BIDECs), as well as marketers’ and dealers’ margins. These are determined separately by the companies.

The latest movement comes after government intervened in the previous pricing window to cushion consumers from sharp increases in diesel prices.

Government reduced the regulatory margin on diesel by GH¢2 per litre for one month, leading the NPA to cut the diesel price floor from GH¢16.97 to GH¢14.97 per litre in the first August window.

For motorists and businesses, the marginal increase in the diesel floor for the second pricing window of August could keep operating and transport costs elevated, particularly for commercial vehicles, generators and businesses that rely heavily on diesel.

The lower petrol floor, meanwhile, offers some relief to motorists, but the extent of any reduction at the pump will depend on how OMCs price their products.