Fuel prices in Ghana could hit all-time high – IES

Fuel prices are likely to hit an all-time high by close of March, according to the Institute for Energy Security (IES).

IES said the expected increment is due to external shocks. Princes of fuel have crossed the GhC5 mark at the pumps.

“The expected increment is not only informed by the marginal rise in finished product prices on the International Market, but largely attributable to the 4.29 percent depreciation of the Cedi against the Dollar over the period. It has not escaped the attention of IES that whereas Ghanaians are complaining of the high cost of fuel, Oil Marketing Companies (OMCs) are also complaining of squeezed margins even as NPA touts its ‘studious’ application of the PRSL,” the IES said in a statement.

Below is the full IES statement:

FUEL PRICES COULD HIT AN ALL-TIME HIGH REVIEW OF MARCH 2019

FIRST PRICING-WINDOW

Local Fuel Market

The first Pricing-window for March 2019 saw average fuel prices at the pump increase by 4.8 percent, crossing the GH¢5 mark per litre one week into the Pricing-window. This was despite the National Petroleum Authority’s activation of the Price Stabilization and Recovery Levy (PRSL). Average prices of Gasoline and Gasoil at the pump consequently increased from GH¢4.94 to GH¢5.17. IES Market-scan shows most Oil Marketing Companies (OMCs) are selling within the range of the prevailing average price, with Lucky Oil selling the leastpriced fuel on the market.

World Oil Market

While Venezuela’s crisis and sanctions continue, Saudi Arabia, a key OPEC player plans to keep oil production below 10 mb/d in April to shore up prices. For these reasons, average Brent crude price saw a marginal increment from $65.59 per barrel to $66.14 per barrel within the window under review. This represents a 0.83 percent rise in price. Gasoline and Gasoil prices also recorded marginal increments according to Standard and Poor’s Platts Assessment. Gasoline increased by 2.74 percent, rising from $552.61 per metric to $567.78 per metric ton. Gasoil increased from $609 per metric ton to $616.58 per metric ton. This represents a 1.25 percent increase.

Local Forex and Fuel Stock

IES Economic Desk’s monitoring of the Foreign Exchange market shows the Cedi lost 4.29 percent of its value against the U.S. Dollar over the past two weeks. It currently trades at GH¢5.58, from a previous average of GH¢5.35. Also, an approximate 180,000 metric tons of finished products was added to Ghana’s Fuel stock.

PROJECTIONS FOR MARCH 2019 SECOND PRICING-WINDOW

The Institute for Energy Security (IES) foresees the likelihood of fuel prices hitting an all-time high. This is irrespective of the 4.8 percent increment Ghanaians experienced in the first Pricing-window of the month. The expected increment is not only informed by the marginal rise in finished product prices on the International Market, but largely attributable to the 4.29 percent depreciation of the Cedi against the Dollar over the period. It has not escaped the attention of IES that whereas Ghanaians are complaining of the high cost of fuel, Oil Marketing Companies (OMCs) are also complaining of squeezed margins even as NPA touts its ‘studious’ application of the PRSL.

Signed:

MIKDAD MOHAMMED