Business News Fri, 11 Mar 2022

IES warns of impending fuel shortage

Fuel prices to hit GH¢9 per litre by end of March

Russia-Ukraine crisis causing hike in global crude prices

New pricing window to open on March 16

Executive Director of IES, Nana Amoasi VII, has warned of a likely shortage of fuel in the coming weeks due to the constant depreciation of the cedi and the Russia-Ukraine crisis.

In an interview on Citi FM, he said the depreciation of the cedi is greatly importing the working capital of marketers.

“I regret to announce this bad news. I hope it doesn’t happen. What we have observed over the past few months within the downstream sector of the Petroleum industry is that the depreciation of the cedi and the international oil price rise is impacting negatively on their working capital," he said.

He stated that the rapid depreciation of the cedi is causing the OMCs to pay more for the same quantities they buy previously.

“Between the last few weeks, the cedi has depreciated from about GHS 7.00 to GHS 7.4 giving a clear 40 pesewas on their business. If we are bringing the same quantity of 600 metric tons today, you will need GHS 7.40. That will amount to about GHS 4, 440 and so 30,000 metric tonnes in the next window, you will need an equivalent of about GHS 7.2 million. A clear depletion of wiring capital.”

He adds that “If the situation continues and it is sustained, we will see a fuel shortage,” he added.

Meanwhile, several analysts have warned that fuel prices will hit GH¢9 in the next pricing window starting March 16.

Executive Secretary of COPEC, Duncan Amoah, also said, “What the situation in Ukraine will mean is that international market prices will continue to surge. Again, we also have a situation where the cedi is not doing so well. I foresee the Ghanaian fuel prices crossing GHS 9.00 per litre before the end of the month.”

Fuel prices have skyrocketed from the beginning of this year to sell at GH¢8.40 at some major oil marketing companies in the country.
Source: www.ghanaweb.com
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