The World Bank in collaboration with the Ministries of Finance and Trade and Industry, and the Petroleum Regulatory Agency (PRA) last Thursday 6th June, 2024 organized a workshop for the review of Sierra Leone Fuel Pricing Formula at Sierra Palms Resorts, Lumley Beach in west-end Freetown.

The workshop attracted many stakeholders including participants from the Oil Marketing Companies (OMCs), Ministries of Finance and Trade and Industry, the transport sector, civil society, the media amongst other notable participants.
In his welcome address, the quintessential Executive Chairman of Petroleum Regulatory Agency (PRA), Mr. Brima Baluwa Koroma, was delighted that PRA has hosted the largest industrial meeting to review and implement a new fuel pricing regime in Sierra Leone.

“My role is to welcome you all but importantly also, to provide a vision of a new fuel regime in Sierra Leone,” The Executive Chairman said.

He explained that like most other African countries, Sierra Leone uses a great confined pricing structure to determine the fuel prices presented to consumers every month, noting that the price structure has not been substantially reviewed or revised by an independent third party for a very long time.

The Executive Director harped on the inconsistent part of the pricing structure that keeps changing continually and the risk that Sierra Leone’s current prices structure doesn’t reflect fairly and the affordability by consumers.

Mr. Baluwa Koroma disclosed that PRA has made several attempts in search of an independent consultancy to lead the review of the Sierra Leone pricing formula since 2020, while he took the opportunity to thank the Ministry of Finance for granting them a World Bank Energy Consultant to review the fuel pricing formula.

“This review will break down and analyse each of the nuclear elements within Sierra Leone’s import priorities and that of the pricing structure with a view to identifying situations from best practice and recommending appropriate improvements,” the Executive Chairman explained.

He furthered that from the onset, the key objective is to avoid the risk of freezing prices and attaining the culture of regular pricing updates based on existing formula, noting that they are going to initiate new pricing formula in the new Act.
Mr. Koroma also disclosed that they want to implement a full-pass-through that is fair and transparent with the object to set the supply chain challenges in the downstream sector and the practical set that will impact the effective and efficient service delivery.
“The expectation is to promote the economy to be strong and competitive fuel industry operating safely, efficiently and economically, and in harmony with the government objective,” the Executive Chairman said, adding that they well have to consider the impact of the formula on each fuel user and also the impact of fuel shortages and power shortages, and how these impacts will be mitigated.

While Mr. Koroma joked that PRA was not at the workshop to increase pump price, he harped on the essence of public awareness in explaining the changes in the new price chain regime throughout Sierra Leone.

Meanwhile, in an exclusive interview with the Executive Chairman during launch time, he emphasized that the petroleum sector touches on every life in any economy, whether in transportation, housing or hospitality, noting that in Sierra Leone in particular, the sector contributes heavily to domestic revenue.

He stressed that government relies on the sector for economic growth and that when you look at the pricing formula, it is a formula wherein they cater for import quality and pricing component which they translate and transfer to the pump price.

“But for pricing formula, by all parameters, it has taken over thirty years since 1994 when the pricing formula that was built by the World Bank has not yet been reviewed since we took office,” Mr. Koroma disclosed.

He said PRA believes that this is the time for consumers to get fair price for petroleum products. “We don’t mind how much the cost of products but we want to be transparent and be fair to the market,” Mr. Koroma assured.

The Executive Chairman also disclosed that there are many dynamics they have to consider in the pricing formula review, including the current use of the highest European grade on the market.

Mr. Koroma disclosed that the World Bank has therefore recommended that they get the West Africa PLATT that can enable the country to get products from Lomé, Togo and Lagos in Nigeria, adding that the Nigerian billionaire Dangote has just announced a very large refinery for West Africa.

“So the World Bank believes that we will be fair to consumers if we are determining our pump price using the West Africa PLATT as opposed to the FOB or Mediterranean grade,” he said, adding, “What is important is that we are going to implement the recommendations from the World Bank because harmonizing the prices of fuel means we are disadvantaging other fuel users.”