OMCs raise fuel prices by 8% as IES predicts further hikes

The Institute of Energy Security (IES) says prices of fuel on the local market have increased by 8 percent this week, and it foresees prices moving up further by roughly 3 percent.

The IES based its forecast on the 16.2 percent increase in Brent crude price, in addition to the 15.4 percent and 15.8 percent appreciation in the prices of gasoline and gasoil respectively.

The forecast price hike also takes cognisance of the depreciation of the local currency against the major trading currency, the US dollar.

“The possible upward price adjustments may not be close to the increases experienced over the last two weeks because other OMCs (Oil Marketing Companies) may hesitate to increase prices at the pump due to competition for market share,” the IES said.

It added: “Aside fuel prices seeing an upward change on the domestic market, the IES Economic Desk found from the foreign exchange (Forex) market that the cedi depreciated by 0.18 percent against the U.S. dollar, to trade at an average price of GH¢5.72 to the dollar over the last 14 days.”

It said leading OMCs like Goil, Total and Shell (Vivo) raised the prices of gasoline and gasoil by 8.3 percent to an average of GH¢4.44 per litre, while the smaller OMCs raised their prices by 7.5 percent, to put the current national average price of both gasoil and gasoline at GH¢4.38 per litre.

The IES market-scan nominated Santol Oil, Benab Oil, Nick Petroleum, Radiance, Champion, Cash Oil, and Zen Petroleum as OMCs with the least-priced gasoline and gasoil on the domestic fuel market, relative to others in the downstream petroleum industry.

The IES’ assessment of the international oil and fuel market over the past two weeks showed that Brent crude price moved above the US$35 per barrel mark, hitting US$42.3 a barrel for the first time since March 10, 2020. The surge in the price of Brent can be attributed to the easing of restrictions on economic activities around the world, as well as reaction to the OPEC+ agreed extension to historic production cuts of 9.6m barrels per day (mbpd) till end July, it said.

Following this, Brent crude appreciated by 16.2 percent from US$33.72 per barrel recorded at the end of the first pricing-window of June to close at US$39.18 per barrel on average terms, the energy think tank said.

The IES added that Standard and Poor’s (S&P’s) Platts benchmark for fuels revealed the average gasoline price rallying by 15.4 percent to close at US$331.79 per metric tonne, while gasoil recorded a price appreciation of 15.8 percent to close trading at US$306.65 per metric tonne.