The Institute of Energy Security (IES) in its review of prices of fuel in the first pricing-window for the month of August is predicting an increase in fuel prices this month.
The institute cited happenings on the international oil and fuel markets, coupled with persistent depreciation of the local currency has set the stage for a potential fuel price hikes in the country.
“Ghanaians have enjoyed relative stability in prices of fuel at the pumps.
“Consequently, Gasoline and Gasoil continue to be sold averagely at GH¢4.85 and GH¢4.83 respectively. Over the period, Oil Marketing Companies (OMCs) have continuously complained of depressed margins,” it said in a statement.
The institute has also called on the National Petroleum Authority (NPA) to avert the potential fuel price increment on the local market.
Read the full statement by the Institute for Energy Security:
Local Fuel Market Performance
Over the past three Pricing-windows, Ghanaians have enjoyed relative stability in prices of fuel at the pumps. Consequently, Gasoline and Gasoil continue to be sold averagely at GH¢4.85 and GH¢4.83 respectively. Over the period, Oil Marketing Companies (OMCs) have continuously complained of depressed margins. As we do every window, IES Market scan still shows the lowest priced fuel at the pump relative to other OMCs can be sourced from Lucky Oil, Zen Petroleum, Alinco Oil, Frimps Oil, Benab Oil, and Pacific Oil.
World Oil Market Prices
Despite the United States’ full enforcement of sanctions against Iran which seek to get Iran oil exports to zero, and Saudi Arabia’s cutting of oil production by some 200,000bpd to forestall falling prices, Brent crude spot price on the international has fallen slightly from the previous trading price of $74 per barrel to a current price of $72.81 per barrel. But on average terms, Brent crude is currently selling at $73.43 per barrel compared to $73.62 per barrel for the previous Pricing-window. Prices of finished products on the international market based on Standard and Poor’s Platts assessment, however, recorded increments for both Gasoil and Gasoline. Gasoil and Gasoline prices recorded upward surges of 1.28% and 3.04% respectively. In trading price terms, Gasoline inched upwards from its previous $713.86 per metric tonne to $735.55, while Gasoil moved from $643.89 per metric tonne to $652.11 per metric tonne.
Local Forex and Fuel Stock
An analysis of the trading currency’s relationship with the Cedi shows the local currency depreciated by 0.62% against the U.S. Dollar, from GH¢4.80 to GH¢4.83 according to IES’ Economic Desk. Across the various terminals in the country, 8000mt of Butane, 60200mt of Gasoil, 37000mt of Gasoline, and 9700mt of Jet fuel were discharged to add on to the country’s stock of fuel; as supplied by Glencore, Sahara, Vitol, BP, and Trafigura to various Bulk Distribution Companies (BDCs).
PROJECTIONS FOR AUGUST 2018 SECOND PRICING-WINDOW
From the foregoing analysis – thus the increases in prices of finished products on the world market, the insignificant fall in Brent crude price, and the marginal depreciation of the Cedi against the U.S. Dollar; IES foresees prices of fuel rising slightly at the pump if the National Petroleum Authority (NPA) doesn’t kick-in the Price Stabilization and Recovery Levy (PSRL) mechanism.
The element of competition between OMCs as a result of the Price-deregulation may also have a noticeable impact on how increments are effected at the pumps should the NPA fail to kick in the PSRL.