Statement: NPA announcement of petroleum price increases

Good afternoon ladies and gentlemen of the media. On behalf of the management of the National Petroleum Authority (NPA), I wish you a belated merry Christmas and prosperous New Year.

We thank you sincerely for honouring our invitation on a short notice. We have called here to announce to you some changes to petroleum prices on the local market which takes effect from the 4th of January, 2011.

These changes to the ex-pump price are inevitable due to the constant rise to crude oil on the world market. From a modest $75 per barrel price that we had about fourteen months ago, prices of crude have reached a $92 per barrel mark in December, 2010. The obvious spread which is about 23 % has necessitated a rise to the ex-pump price.

Ladies and gentlemen, there are some other contributing factors to why ex-prices are going up in the regions of between 25% and 30%. One of these factors is the TOR debt recovery levy which Parliament approved before Christmas. The objective will be to retire debts owed by the country's only refinery. The levies have gone up from 2-8 pesewas per litre for petrol and 2.5 pesewas per litre on Diesel. Secondly, Distribution margins have also gone up by 4 % with BOST margins are also up from GHp 2.25 per litre to GHp3 per litre and Primary Distribution Margins are also up by 2.5 per litre from 1.0 per litre.

Members of the press, ladies and gentlemen, most of you have recently reported in your various media of calls by marketers and dealers in the petroleum industry to have their margins go up as well. Let me say, after carefully studying their numerous proposals and scenarios, we have approved a rise in their margins to 10.48 pesewas per litre from 8.28 pesewas per litre. The increase in the margins for the dealers and marketers is expected to meet their rising cost operations, improve service delivery and efficiency.

Let me say here, most importantly is that we will continue to ensure stiffer regulations in the industry to ensure equal benefits for the consumer who is the receiving end of these increases.

All put together, gas oil and gasoline are to see an up to 30% rise in ex-pump price while LPG rises up to 25%.

Ladies and gentlemen, after almost 14 months of price stability, these would be the new ex-pump prices by 6am tomorrow Tuesday 4th Januray, 2011.

Petrol: 152.07 GHp from 116.98 GHp per litre Diesel: 153.46 GHp from 118.05 GHp per litre LPG; 104.76 from 83.81 per kilogram.

We are pleased to say that the consumer has not been completely ignored in these new changes. Kerosene and Premix fuel prices remain unchanged. This goes to the core of our society to mitigate the cost of living for consumers in the lower brackets.

HISTORY:

Price Trend in 2008:

May 3, 2008- Government to fix ex-pump prices.

November 1, 2008- First price downward change after crude has peaked at $147 per barrel in 2008. The subsequent price drop in crude oil to $68 per barrel, government did not pass on all the gains to the consumer. Similarly, downwards price changes on 1 st December 2008 when crude had dropped to $40 per barrel, the government again did pass the gain on to the consumer, however, on the 12 December 2008, after the fist round of elections, the government decided to further reduce the pump price by about 15%.

2009 to Date:

Prices were fixed from October 31, 2009 to date. Within the period, crude prices have increased by 23% and most of the products have also increased about the same magnitude. TOR debt recovery levy increased to 8pesewas per litre by Parliament contributing to about 5.13% to the pump price plus margins increases resulting in about 30% increases at the pump.

To conclude, the Authority will continue to monitor the price on the international market and accordingly review prices for the benefit for all stakeholders. Thank you all for coming and once again HAPPY New Year!