COPEC Endorses GH¢2 Diesel Subsidy but Calls for Strategic Fuel Reserve to End Price Shocks

Ghana’s Chamber of Petroleum Consumers (COPEC) has backed the government’s decision to absorb GH¢2 per litre of diesel, describing the measure as a necessary response to soaring fuel prices, while urging policymakers to adopt a long-term strategy that reduces the country’s exposure to volatile global oil markets.

The endorsement comes after President John Dramani Mahama directed the state to subsidise diesel prices, a move aimed at cushioning transport operators, businesses and consumers after diesel prices approached GH¢20 per litre at some filling stations.

COPEC Executive Secretary Duncan Amoah said the intervention was justified by the unusually wide gap between diesel and petrol prices, which had placed a disproportionate burden on commercial transport operators and diesel-dependent businesses.

While describing the subsidy as a timely relief measure, Amoah cautioned that repeated government interventions could become fiscally unsustainable if they evolve into a permanent feature of fuel pricing policy.

Instead, he urged the government to establish a strategic petroleum reserve system that would allow Ghana to procure fuel when international oil prices are low and release those stocks during periods of elevated global prices.

Such a mechanism, he argued, would provide a more resilient buffer against external supply shocks while reducing the need for costly emergency subsidies.

Although COPEC welcomed the diesel-focused intervention, Amoah said petrol consumers could also have benefited from modest relief, noting that households across the economy continue to face rising living costs despite the sharper increase in diesel prices.

The chamber also pointed to growing competition among oil marketing companies as a positive development. According to Amoah, some retailers, including Star Oil, had already lowered diesel prices ahead of the government’s directive, while other major operators, including GOIL, were also responding to changing market conditions.

The diesel subsidy is expected to take effect on 4 August, providing short-term relief for transport operators and helping to ease inflationary pressures linked to higher fuel costs. However, COPEC argues that Ghana’s long-term energy security will ultimately depend on structural reforms that strengthen fuel supply resilience rather than periodic price interventions.