The formula will also give the public an insight into how petroleum prices are worked out, as well as trends on the world market. The objective is to ensure transparency in the petroleum downstream sector.
It also seeks to protect the interest of consumers and stakeholders, by providing them with information in order to assist them to make informed purchase decisions.
The launch followed the price liberalisation of the petroleum downstream sector, which gave Bulk Oil Distribution Companies (BDCs), importers of refined petroleum products and Oil Marketing Companies (OMCs) the free hand to price their products.
The strategy will also result in the cessation of subsidies on fuel prices by the government.
The government’s indebtedness to the BDCs as a result of subsidies currently stands at more than $800 million.
The CBOD Price Indicators include the Ex-Refinery Price Indicator (XPi), Oil Traders Index (OTi) and fuel forex rate (FuFeX30), which will be duly complied with by the Oil Marketing Companies (OMCs).
The XPi is an estimate of ex-refinery price at which the BDCs may sell their petroleum products to OMCs.
The OTi is an indication of the difference between the average actual traded ex-refinery prices by the BDCs and the XPi, represented in percentage terms while the FuFeX30 is a 30-day forward forex rate computed using the covered interest parity model adjusted by the Ghana Sovereign Bond Spread.
Speaking at the launch, the Chief Executive Officer of the Ghana Institute of Public Policy Options (GIPPO), Dr Charles Wereko-Brobby, said the move was welcoming news for consumers.
He said the introduction of the pricing formula was a clear indication of the BDCs’ preparedness to regulate itself.
“This will provide the opportunity for consumers and the general public to know who is making unreasonable profits, and to assure consumers that they are not taken for a ride,” he said.
Dr Wereko-Brobby challenged the media to play a key role in educating and informing the public on the pricing formula and the entire deregulation process.
The Chief Executive Officer of the CBOD, Mr Senyo Hosi, said the XPi and the OTi would be published every week through the issuance of press releases as part of market reports emanating from the chamber.
He said the introduction of the price liberalisation regime of petroleum products was a gradual step to eliminate the issue of price cartels.
The Executive Director of the Africa Centre for Energy Policy (ACEP), Dr Mohammed Amin Adams, applauded the government for the deregulation process, noting that “it is imperative for government to intervene when petroleum prices are difficult for consumers to bear”.
He called on the National Petroleum Authority (NPA) to create a portal and publish the prices of crude at the ex-pump in order to keep consumers well informed.
In his view, any time an OMC wants to change its ex-pump price, the NPA should be prompted before that is done.