Consumers brace for another fuel price shock next week

Ghanaian businesses and households alike, as well as government itself, are bracing up for new price shocks as the renewed surge in the Brent crude oil benchmark above US$100 per barrel in the second week of September 2026 is likely to create a fresh inflationary test for Ghana, this coming at a time that domestic price pressures had begun to moderate.

Brent settled at US$101.21 per barrel on September 9 and subsequently traded above US$105, reaching almost US$110 intraday on September 11 before retreating.

The immediate trigger is the sharp deterioration in the Middle East security environment and the threat to oil flows through the Strait of Hormuz and other strategic shipping routes. Brent was still around US$90–92 during the period used to determine Ghana’s first September pricing window.

For Ghana, therefore, the important issue is not simply that crude has crossed the psychologically significant US$100 threshold. It is that the increase has occurred after the price-setting inputs for the first September window had largely been established. This means the full effect is more likely to emerge in the second pricing window, beginning September 16. Instructively the expected petroleum price hikes will come just a few days before Ghana ‘s biggest commercial road transport union, the GPRTU may implement a 30 per cent increase in transport fares – from September 21 – citing rising fuel and other operating costs.

OMCs have limited room to absorb the shock

The first September window already demonstrated the extent to which international petroleum prices were putting pressure on the Ghanaian market. The National Petroleum Authority raised the petrol price floor from GHc13.92 to GHc14.53 per litre and the diesel floor from GHc15.19 to GHc15.60. At the same time, Government retained a GHc2-per-litre reduction in the regulatory margin on diesel to moderate the impact on consumers.

OMCs initially responded cautiously. GOIL, for example, maintained petrol at GHc15.43 and diesel at GHc17.26 per litre, while Star Oil subsequently moved to the same GHc15.43 petrol and GHc17.26 diesel levels. TotalEnergies was charging GHc16.18 for petrol and GHc17.59 for diesel.

This illustrates an important fact – that the international oil-price shock does not automatically translate one-for-one into pump prices in Ghana. OMCs can temporarily absorb part of the increase through margins, inventory positions and competitive pricing.

But their ability to continue doing this is limited. Once inventories purchased at higher international prices have to be replenished, the increased cost must eventually be reflected in pump prices unless another participant in the chain—principally Government—absorbs it.

The second September window is consequently likely to be considerably more difficult for OMCs than the first.

A significant increase is now more likely at the 2nd September window

The Chamber of Petroleum Consumers (COPEC) has already warned that the Brent price surge is likely to push Ghanaian pump prices higher from September 16. Its Executive Secretary, Duncan Amoah, has pointed out that crude-price movements take some time to pass through the refining, shipping and importation chain.

That lag is important. The first-window prices were largely based on a period when Brent averaged around US$90–92. By the time the second-window calculations are made, Brent has moved through US$100 and beyond, while refined-product prices and importation premiums have also risen.

A reasonable working scenario is therefore for petrol and diesel prices to rise by roughly 5–10 per cent during the second September window, assuming Brent remains around US$100–110 and the cedi does not suffer a major depreciation. The precise adjustment will depend on the average international refined-product prices, freight and insurance premiums, the exchange rate and the extent to which OMCs absorb part of the increase.

On current pump prices, such an adjustment could put ordinary petrol broadly in the GHc16.20–GHc17.00 per litre range, while diesel could move towards approximately GHc18.00–GHc19.00 if the international shock persists and margins are not compressed.

To be sure though, these are possible price ranges rather than forecasts of the NPA’s eventual price floors. Indeed, the first September experience showed that individual OMCs can price below or above industry projections depending on their inventories and commercial strategies.

The more worrying issue is that this could be the beginning of a sequence rather than a one-off adjustment. If Brent remains above US$100 for several weeks, October’s pricing windows could face another round of upward pressure.

The timing could hardly be worse for inflation levels

The impending oil shock is coming at a delicate point in Ghana’s disinflation process.

Consumer inflation fell from 5.3 per cent in June to 4.6 per cent in July—the first decline since March. Producer-price inflation, however, moved in the opposite direction, rising from 3.5 per cent in June to 4.0 per cent in July and instructively, consumer inflation then proceeded to rise again, to 5.0 per cent in August.

Even more instructively, this resulted largely by an acceleration in non-food inflation which rose to 6.8% in August, up from 6.1%–6.7% the previous month, driven largely by transport and utility costs.

Higher petroleum prices threaten to negate any improvements in consumer price inflation (CPI) while accelerating the rise in producer price inflation (PPI).

The first effect will be direct. Petrol and diesel are themselves components of consumer expenditure. The second and potentially larger effect will be indirect: diesel is an important input into commercial transport, haulage, agriculture, construction, manufacturing, mining and distribution.

This produces a second-round inflation effect.

A manufacturer facing higher diesel costs will raise its factory-gate price. A farmer facing more expensive mechanization and transport will face higher production costs. A wholesaler will pay more to move goods between production centres, warehouses and markets. Retailers will eventually pass some of these costs to consumers.

That makes PPI particularly vulnerable in the short term. The July increase to 4.0 per cent could accelerate further as September’s higher fuel costs work through production and distribution chains.

CPI would probably respond more gradually, but transport fares could dramatically shorten the transmission period.

Transport fares could become the inflation multiplier

The announced intention by commercial transport operators to raise fares is therefore potentially more consequential than the direct increase in fuel prices.

The GPRTU has announced a proposed 30 per cent increase in transport fares from September 21, citing rising fuel and other operating costs.

Even if the eventual approved increase is lower than 30 per cent, the implications are substantial because public transport is used extensively by workers, traders, students and businesses.

The danger is a feedback loop in which higher oil prices on the global market lead to higher fuel prices and consequently higher transport costs, and thus higher product distribution costs, and ultimately, higher consumer prices. The feedback loop would be completed when this creates higher wage and operating cost demands which would then lead to further price increases that could become self-perpetuating, at least until the trigger – high global oil prices instigated by the ongoing Persian Gulf conflict – is removed.

It is precisely this second-round effect that Government and the Bank of Ghana will want to prevent.

What can Government do?

Government has several options, although none is cost-free.

First, it can temporarily extend or increase the diesel intervention. The existing GH¢2-per-litre reduction in the diesel regulatory margin has already demonstrated that Government can cushion consumers without completely restructuring the deregulated pricing system. But doing so for an extended period would impose a significant fiscal cost, particularly if Brent moves towards US$110–120.

Second, Government could target the intervention rather than subsidize all fuel consumption. Public transport operators, essential food distribution, agriculture and strategically important productive sectors could receive temporary support. This would be cheaper and economically more defensible than a universal subsidy.

Third, the authorities could engage OMCs to moderate margins temporarily. Competition has already caused some marketers to hold prices below what the underlying international cost pressures might justify. A coordinated effort to encourage temporary margin compression could slow the pass-through, although Government must avoid distorting competition or undermining the deregulated market.

However, energy industry and transport sector analysts agree that Government should resist the temptation to respond to the transport-fare threat simply by suppressing fares administratively. If operators genuinely face a large increase in fuel and maintenance costs, an imposed fare freeze merely transfers the financial problem to drivers and owners and risks service deterioration. A temporary, transparent transport-support mechanism would be more sustainable.

The bigger risk is persistence, not one expensive pricing window

For Ghana, a temporary Brent price of US$100 is uncomfortable but manageable. The more serious threat would be Brent remaining above US$100 for several months.

If the international price spike proves temporary, Ghana could absorb much of the shock through OMC margins, the cedi’s relative stability and limited fiscal interventions. But if geopolitical disruptions keep crude around US$105–120, the impact would increasingly migrate from filling stations into transport, food, manufacturing and household budgets.