Fuel prices in Ghana move twice a month, and every move is news. The mechanism behind them is simpler than the headlines make it look.

Two pricing windows a month

Prices are set for pricing windows: from the 1st to the 15th of each month, and from the 16th to the end. Before each window, the National Petroleum Authority (NPA) publishes the taxes, levies and margins that apply, and fuel companies set their prices for the window. That is why pump prices change on the 1st and the 16th, and why the radio talks about “the next window”.

Who sets the price

Petrol and diesel have been deregulated since 2015: each oil marketing company sets its own pump price, which is why the price differs from one brand of filling station to another. The NPA sets the price only of a few regulated products, such as premix fuel for fishing boats.

Every company works from the same formula in the NPA’s pricing guidelines:

  • The ex-refinery price: the international price of the product, plus the supplier’s premium, converted to cedis at the exchange rate.
  • Plus taxes and levies: fixed amounts per litre that go to the government and to funds such as road maintenance, energy debt recovery and price stabilisation.
  • Plus margins: for the distributor, the marketer, the dealer at the pump, and for transport and storage.

So the pump price follows two things you can watch: the world price of petrol and diesel, and the cedi against the dollar. A stronger cedi lowers prices even when crude oil does not move.

— Inflation and the cedi

The price floor

Since April 2024 the NPA has also set a price floor for each window: the lowest price at which any company may sell. It says the floor stops large companies undercutting rivals below cost to drive them out and then raising prices. Critics say it stops drivers getting the full benefit when costs fall. Either way, it is why prices rarely fall as far as world prices do.

The NPA announces the floor for each window, and the news reports it alongside the expected pump prices.

What it means for you

  • Prices differ between stations of different brands, sometimes by enough to matter on a full tank. The big companies change their prices on the first day of a window; smaller ones may follow later.
  • Fares follow fuel, but not window by window: trotro and taxi fares are negotiated between the transport unions and the government, usually after a run of increases.

— Trotro fares and how they are set — Driving in Accra

The pricing guidelines are on the NPA’s website, https://npa.gov.gh.