Exchange rate stability key to cushioning fuel price shocks – NPA CEO

The Chief Executive Officer of the National Petroleum Authority (NPA), Godwin Edudzi Tameklo, has underscored the importance of exchange rate stability in protecting Ghanaians from the full impact of rising global fuel prices.

Speaking on TV3’s Big Issues programme, Tameklo noted that although global crude oil prices have surged due to geopolitical tensions and supply chain disruptions, effective management of the cedi has helped moderate the impact on domestic fuel prices.

He commended the economic management under the administration of President John Dramani Mahama, stating that relative stability in the local currency has played a critical role in cushioning consumers.

According to him, Ghana imports nearly 60 per cent of its petroleum products, making domestic fuel prices highly sensitive to fluctuations in the exchange rate.

He explained that a weaker cedi would have significantly increased pump prices.

“If the Ghana cedi were trading at 15 to one dollar, petroleum products would have been around GHS23 per litre,” he said, adding that current exchange rate stability has helped prevent such sharp increases.

Tameklo also highlighted rising global cost pressures, noting that Brent crude oil prices have climbed above $100 per barrel, up from about $66 prior to the recent Middle East tensions.

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He added that freight and insurance costs have also surged, particularly for diesel, further driving up import costs.

Despite these developments, he said exchange rate management has helped anchor fuel prices locally, preventing what could have been a more severe economic impact.

He recalled previous periods when the cedi depreciated to nearly 17 to the dollar, warning that similar conditions today would have significantly worsened fuel price increases.

Tameklo emphasised that maintaining currency stability remains a key policy tool for safeguarding the downstream petroleum sector and moderating the effects of global price volatility on consumers.

He urged the public to appreciate the role of sound economic management in mitigating external shocks, noting that while global pressures persist, prudent policies can help prevent extreme price surges.