Cedi fall threatens fuel price stability - IES

The Institute for Energy Security (IES) has said the relative stability for the price of Brent Crude, and global prices for gasoline and gasoil points to the stability of local fuel prices but “the only variable that threatens the stability of prices on the local market is the steep decline in the value of the Ghanaian Cedi against the U.S Dollar.”

In its review of February’s second pricing-window, IES said it expects that the managers of the Ghanaian economy will work to halt the fall in value of the cedi which is “posing a huge challenge to oil importers.”

On the local forex market, the U.S Dollar continues its onslaught on the Ghana Cedi, with data from the banking sector indicating that the Cedi slipped further by an average of 3.7% to GHS4.55 against the dollar, from an opening of GHS4.38.

“It is worrying that from the first pricing-window in January 2017 to date, the cedi has depreciated by over 10%,” IES observed, adding: “The combined stock of gasoline and gasoil in-tank increased from 117,900 metric tonnes to 134,750 metric tonnes in the last window, capable of meeting almost three weeks of national demand.”

The price of fuel on the local market rose between 3.6% and 4.9% within the second pricing-window for the month of February 2017.

These increases, according to IES, were effected by almost all the Oil Marketing Companies (OMCs) within the session. As a result, gasoline and gasoil is currently selling at GHS4.23 per litre and GHS4.1 per litre on average terms.

IES said its scan indicates that Lucky Oil, Frimps Oil, Goil and Puma Energy are a few of the OMCs selling the cheapest gasoil and gasoline on the market as of today.

IES said world oil market indices over the last thirteen days show that the Benchmark Brent crude price remained relatively stable on average terms to close the Pricing-window at $56.0 per barrel.

The stability in price was as a result of producers outside OPEC that signed up to the oil cartel’s output cut, lagging on implementation of the deal and also significant rise in U.S oil inventories as reported by Energy Information Administration (EIA).

Platts also reported a marginal increase in global prices of both gasoline and gasoil. Gasoline price rose by 1.02% within the period under review, and in similar fashion gasoil price rose from $484.14 per metric tonne to $485.35 per metric tonne, indicating a percentage rise of 0.24.