Drag NPA to court over new pricing guidelines – ACEP urges OMCs, BIDECs

The Africa Centre for Energy Policy (ACEP) has asked oil marketing companies and Bulk Oil Import, Distribution, and Export Companies (BIDECs) to take legal action against the National Petroleum Authority (NPA) over the planned implementation of the amended petroleum pricing guidelines.

The new pricing guidelines, among other provisions, set a price floor for petroleum products, below which oil marketing companies and Liquefied Petroleum Gas (LPG) firms cannot price their products – a move which has triggered opposition from industry players.

“ACEP remains committed to advocating for a well-regulated downstream sector that prioritises competition, product quality, and consumer protection. We urge OMCs and BIDECs, who are committed to improved and cost-effective service delivery, to fight such illegal regulations and proceed to court to avert regulatory sabotage of genuine business efforts. ACEP will support any such challenge and demand accountability from the NPA in the public interest.”

The energy think-tank makes the point that, this decision by the NPA reflects a deepening of regulatory failure to effectively protect the consumer and the industry and has led to the influx of illicit and substandard products on the market, theft of tax revenue by some OMCs and a burdensome passthrough levies and charges to the consumer as well as anti-competitive behaviour.

“Rather than addressing the aforementioned challenges, the NPA is opting for a “lazy” solution that rewards inefficiency, discourages competition and punishes the consumer at the pump. Setting price floors creates a system that benefits OMCs and Bulk Oil Import, Distribution, and Export Companies (BIDECs), which have a weaker market presence and are struggling to sell volumes at competitive rates. This protectionist policy is detrimental to creativity and competitive business strategy and ultimately harms consumer welfare”, ACEP mentioned in a statement.

ACEP urged the NPA to prioritise progressive regulatory functions through a more targeted approach that enforces progressive rules and sanctions companies engaging in unfair practices by employing data-driven approaches focused on identifying and eliminating anti-competitive behaviour without undermining business creativity and cutting-edge strategies that benefit the consumer.

This, it said will foster a fairer market environment for consumers and businesses in the long run.

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