Fuel prices expected to fall by 3% - IES

Fuel prices is expected to fall by about 3% later this month. This is according to the Institute for Energy Security (IES).

The IES projections comes at the back of drop of Brent crude, gasoline and gasoil prices on the world market.

In the first pricing window of this month [March 2017], the markets recorded an increase in prices of petrol and diesel at the pump by all Oil Marketing Companies (OMCs) as a result of the depreciation of the Ghana cedi against the dollar.

In a statement copied to the thebftonline.com, IES stated that, the national average retail price for petrol and diesel jumped 1.18% and 2.6% to GHS4.28 per litre and GHS4.21 per litre respectively.

But the IES, in their statement stated: “Benchmark Brent crude price for the period under review dropped by 4.4 per cent to average $53.5 per barrel. This is as a result of a rise in U.S. shale production, which is threatening the output cuts by OPEC and major crude-producing nations. The Platts benchmark prices within the same period for gasoline dropped by 6.75 per cent while gasoil fell by 2.65 per cent.”

“This left gasoline and gasoil prices on the world market closing at $530.63 per metric tonne and $472.48 per metric tonne respectively, from an opening of $560.69 per metric tonne for gasoline and $485.35 per metric tonne for gasoil,” the statement added.

However, the IES in their statement further noted that Local Forex and Fuel Stock Figures from the banking sector indicates that, the cedi performed relatively well against the U.S. dollar, by closing at GHS 4.52 against the opening rate of GHS4.55 per dollar.

According to the IES, “The stock of gasoline and gasoil in the country hasn’t changed much from the first pricing-window, and capable of meeting just 25-days of fuel demand in the country.”

For the fact that, there have been a substantial drop in price of Brent crude, and that of both gasoline and gasoil on the world market, and there have been a relative stability in the forex exchange, the IES projected that, “IES can comfortably project fuel prices on the local market to fall by at least 3%.”

The IES therefore, called on Oil Marketing Companies to ensure that they effect the changes at the pump in line with the oil market fundamentals, and in the same manner they do effect upward adjustments when market variables so dictate.