An energy expert, Benjamin Nsiah,has called for a review of Ghana’s petroleum pricing framework, arguing that the current system is unable to protect consumers and businesses from frequent fuel price fluctuations.

Nsiah, of the Centre for Environmental Management and Sustainability Energy (CEMSE), said the existing pricing model, which relies heavily on international market prices and the exchange rate, exposes the economy to external shocks.

Speaking on the Asaase Breakfast Show on Tuesday (28 July), he said Ghana needs a more flexible fiscal and pricing regime that can absorb global market volatility while maintaining stability at the pumps.

“The whole pricing of petroleum products, we need a new framework. This is very transparent, it gives us the data, it helps. But I think that because of the short-term data, whereby every window prices change, it affects planning,” he said.

He explained that global factors, including geopolitical tensions involving Iran, Israel, Russia and other oil-producing regions, have disrupted supply chains and pushed up petroleum prices internationally.

Mr Nsiah added that the depreciation of the cedi has worsened the situation, noting that the exchange rate remains a major component of Ghana’s fuel pricing structure.

“The cedi depreciation and price surge on the international market are the reasons why ex-pump prices are going to surge,” he said.

He warned that continued fuel price increases could have wider economic consequences, including rising inflation, increased transport costs and higher interest rates.

According to him, increases in fuel prices affect several components of the Consumer Price Index (CPI), including transportation, food and utilities.

“When inflation goes high, the Bank of Ghana tells us that inflation is high because there is excess liquidity in the market. They introduce monetary policy, interest rates go high and it contracts the economy,” he said.

Mr Nsiah also called for a review of Ghana’s fuel tax and levy structure, saying frequent amendments to petroleum-related laws create uncertainty.

He argued that instead of repeatedly adjusting taxes and levies, policymakers should develop a long-term framework that cushions consumers during periods of global price shocks.