The Petroleum Sector Should Be Fully Deregulated And Depoliticized In The National Interest

"For more than a decade, a process to deregulate the domestic petroleum sector remains uncompleted. This is because successive Governments have not been able to muster the necessary political courage to implement it fully. At best, the policy has been implemented on a piecemeal basis. In the process, Tema Oil Refinery (TOR), Ghana National Petroleum Corporation (GNPC), and the National Petroleum Authority (NPA) have maintained their dominance over importation and retail price setting. On the whole, ex-pump prices have not been allowed to fully reflect industry costs. This implies that Governments have been subsidizing petroleum products, ostensibly intended to cushion consumers and the economy against price shocks. The question, however, is whether continued regulation and subsidization of the petroleum sector can be justified on economic or even social grounds. This paper argues that the petroleum subsidy that is provided universally can only be defended on political grounds but not on economic or social grounds as the costs outweigh the benefits. The paper suggests that full deregulation of the petroleum sector and depoliticization of the pricing scheme will serve the national interest better."