The attention of the National Petroleum Authority (NPA) has been drawn to a statement made by the Hon. Member of Parliament for the Ajumako-Enyan-Esiam Constituency, Dr Cassiel Ato Forson, in which he accused the NPA of acting with impunity and engaging in an act of illegality by receiving revenues through the collection of the Unified Petroleum Price Fund (UPPF), BULK OIL Storage and Transportation (BOST) and Fuel Marking Margins.
The NPA wishes to state that its mandate to collect, charge or receive revenue with respect to the UPPF, BOST and Fuel Marking Margins is derived from the National Petroleum Authority (Prescribed Petroleum Pricing Formula), Regulations 2012, Legislative Instrument (LI) 2186, passed by the Parliament of the Republic of Ghana in July 2012.
In accordance with LI 2186, the UPPF, BOST and Fuel Marking Margins are Distribution Margins. The UPPF Margin is a margin incorporated in the price buildup of petroleum products to compensate transporters who move petroleum products from the depots to the retail outlets across the country and to ensure that we have equal pricing of petroleum products in the country irrespective of the geographical location.
The BOST Margin is a margin incorporated in the buildup of petroleum prices used to cover the cost of maintenance and operations of BOST depots across the nation and to undertake its expansion programmes of the depots (this margin is collected by BOST Co. Limited and not NPA).
The Fuel Marking Margin is also a margin incorporated into the price buildup of petroleum products to pay for the marking of the products to prevent tax revenue loss, smuggling and adulteration of petroleum products. We wish to emphasize that these margins are purely based on the cost of undertaking the prescribed activities and not for any other reason.
These margins were not just increased in 2021 but have been increased periodically since 2009 to this present time, due in part to the increases in the cost of operations in these activities over the time.
Regulations 9 to 13 of the LI 2186 determines how to review the prescribed petroleum pricing formula, which states that the pricing formula shall include these margins and the Authority shall indicate these margins to take care of the above intended costs accordingly.
It is without doubt that the absence of these margins in the price buildup would have hindered the achievement of the objectives for which these margins were introduced into the prescribed petroleum pricing formula. For example, uniform pricing of petroleum products did not exist until the introduction of the UPPF Margin in the 1990s.
We therefore wish to state emphatically that NPA is acting legally as specified in the Prescribed Petroleum Pricing Formula Regulations 2012, LI 2186 and that the UPPF, BOST and Fuel Marking Margins charged in the price buildup are not illegal charges as asserted by Dr. Cassiel Ato Forson.
SIGNED
CORPORATE AFFAIRS DIVISION
