Cabinet has given approval for Oil Marketing Companies (OMC) and other distributors to set retail prices for petroleum products according to a pricing formula and without prior review or approval by an official authority.
A statement issued in Accra on Thursday and signed by Dr Paa Kwesi Nduom, Minister of Energy said the Cabinet endorsed the on June 10 and the pricing system would have parameters set to ensure that all costs and applicable taxes were fully recovered.
The statement said the Government would soon put in place the legal and institutional framework for the new petroleum pricing and oversight, which would take effect from February 15, 2005.
It said draft legislation governing the deregulation of the petroleum downstream sector would be submitted to Parliament for passage into Law. The statement said in this regard, the terms of reference for the development of the Deregulation Policy and Law as well as the guidelines to the Consultant for the establishment of national petroleum regulatory body had been prepared.
It said in the current phase of the deregulation, a Memorandum of Understanding (MOU) had been signed between the Tema Oil Refinery (TOR) and the OMC's to signify the take off of the partial liberation of the sector to allow the private sector to participate in the importation of finished petroleum products through competitive tender to supplement the production capacity of TOR.
The statement said the first and second tenders for the importation of finished petroleum products took place on March 31 and May 24, this year and that Shell Ghana Limited and GOIL, respectively, won the tenders. It said in the transitional phase of the deregulation programme up to February 15, next year, the Government would find a good way to manage any potential problems created as a result of fluctuations in international oil prices in order not to disrupt its fiscal programme.
The statement said the Government was, therefore, in consultation with all stakeholders in the petroleum industry and the public could be assured that the best interest of the Ghanaian taxpayers would be protected under the deregulated market system.