Business News of 2014-06-19

Fuel prices to go up next week

Petroleum prices are likely to go up from Monday to enable oil distribution and marketing companies to recover the cost in procuring crude oil into the country as the fall in the value of the cedi against the major trading currencies especially the US dollar has increased crude oil import cost.

Already some filling stations have begun hoarding their reserves in wait for the imminent adjustment in petrol products.

“We have been asked not to sell petrol (premium/super) because fuel prices will be increase on Monday,” a fuel attendant said.

Currently, Premium sells at 273 Ghana pesewas (GHp) a liter at the pumps while Diesel is sold at 265GHp per litre. Kerosene is also traded at 261GHp a litre and 287GHp a kilogramme for LPG. Gas Oil and premix fuel have been pegged at 279GHp and 125GHp a litre respectively.

Since the year began, prices of petroleum products have been adjusted upwards by three times, which sums up to about 16 percent as a result of the slide in the currency -- which seems relentless despite the strong intervention by the central bank in February.

The National Petroleum Authority (NPA), which adjusts prices fortnightly, has forecasted a weaker cedi in the next couple of months, implying more pain in store for consumers- who are also struggling with energy supply rationing.

Meanwhile, the CEO of the Chamber of Bulk Oil distribution Companies, Senyo Hossi has said that the inability of bulk oil companies’ to raise letters of credits from the banks to pay suppliers could cause fuel shortage in the country within the next few weeks.

As per Mr. Hossi accounts, the government’s failure to pay the companies several billions of dollars being subsidies on petroleum products since 2011 has resulted in stocks that could last for about a week.