Fuel prices may surge by approximately 1.5% - IES

The Institute for Energy Security (IES) has predicted that fuel prices may go up slightly.

Going by the 3.68% surge in price of Brent crude oil, in addition to the 5.59% and 5.31% rise in the prices of Gasoline and Gasoil respectively on the international market; the IES foresees prices of fuel on the domestic market going up marginally even though the Cedi appreciated against the US dollar by 0.17%.

However, the IES said, competition between Oil Marketing Companies (OMCs) to control and gain more market shares, and mounting pressure on government to reduce prices of fuel may result in fuel prices remaining largely stable within the second Pricing-window of July 2020.

Fuel prices were adjusted upward as predicted by the Institute for Energy Security (IES). The First Pricing-window of July 2020 saw all Oil Marketing Companies (OMCs) adjusting prices at the pump to record a percentage average increase of 3.66%, thus putting the national average price of both Gasoline and Gasoil at GHc4.79 per litre. Prices of market leaders - Goil, Shell (Vivo), and Total rallied from Gh¢4.65 to close the window at Gh¢4.82.

Over the period under review, Zen Petroleum, Benab Oil, Nick Petroleum, Radiance, Champion, Cash Oil and Santol maintained their status as OMCs that sold the least-priced Gasoline and Gasoil on the local market relative to others in the industry, as monitored by the by IES Market-scan.

The price of Brent crude continues its firmly fixed rallying as a result of growing demand for crude products such as Gasoline, Gasoil, Jet fuel and the demand emanating from the manufacturing sector. On an account of these, Brent crude price rallied by 3.68% from $41.08 per barrel recorded at the end of the second Pricing-window of June to close at $42.59 per barrel on average terms, at end of the first Pricing-window of July.

S&P’s Platts benchmark for fuels shows average Gasoline price gained 5.59% to close at $390.73 per metric tonne, from a previous average of $370.05 per metric tonne. Gasoil appreciated by 5.31% to close trading at $361.80 per metric tonne, from a previous average of $343.57 per metric tonne.

Data collated by IES Economic Desk from the Foreign Exchange (Forex) market shows the Cedi remained largely stable in relation to the U.S. Dollar, appreciating by 0.17% against the major trading currency for oil. The Cedi traded at an average price of Gh¢5.71 to the Dollar over the period, a departure from the Gh¢5.72 recorded in the second Pricing-window of June, 2020.