GHANA IS unlikely to achieve a single digit inflationary figure if petroleum products prices keep on escalating as is seen recently.
This is because increase in the prices of petroleum products affects almost every activity in the country especially food and beverages which forms over 50% of all the components used in the calculation of the Consumer Price Index (CPI) as well as the inflation rate. Increase in petroleum prices affects food and beverages in a positive way, as prices of food and beverages rise while inflation also rises.
From Ghana's economic history, whenever prices of fuel products go up, prices of food and beverages, alcohol and tobacco products, clothing and footwear, housing and utilities, transportation and communications, housing and utility, medical and health as well as household goods, would also increase because of their positive correlations with fuel prices.
It is also expected that July and August inflationary rate would increase above the current inflation rate into the future.
Inflation, which is a general continuous increase in prices, has been reducing in Ghana since the beginning of the year from 14.6% in January to 12.1% in February to 9.9% in March and then to 9.5% in April. However, it started to rise again after the previous petroleum price hikes were done.
With the petroleum price increases, having a positive correlation on prices of food and beverages, which form over 50% of the items in the basket, the increases in prices resulted in an increasing inflation, which started this year.
Inflation rate rose from 9.5% in April to 10.2% in May. This further increased to 10.5% in June as released by the Ghana Statistical Service. The National Consumer Price Index (CPI) for June 2006 was 456.56 compared to 451.10 for the previous month, representing a monthly change of 1.2%. "This resulted in a year-on-year inflation of 10.5% compared to 10.2% in May 2006". The increase in CPI was largely due to the food and beverage component of the index.
Oil Marketing Companies on Thursday increased prices of petroleum products by between 10% and 20% following approval given by the National Petroleum Authority (NPA). Visits to some of the fuel filling stations showed different prices in the ex-pump prices of petrol, diesel, kerosene and liquefied petroleum gas (LPG) because of the deregulation of the sector.
Total gas stations are quoting a litre of petrol at ¢9,360; a litre of diesel is ¢ 8,511 and litre of kerosene stands at ¢7,689 cedis. The previous prices were ¢8,509 for petrol, ¢7,709 for diesel and ¢6,418 for kerosene.
Mobil Ghana Limited is selling petrol at ¢9,364 per litre, diesel at ¢8,511 per litre compared with ¢8,512 and ¢7,709 of petrol and diesel respectively.
With LPG, 5kg LPG sells at ¢38,000, a 13 kg LPG is ¢99,000 and a 14.5 kg LPG sells at ¢110,200.
