The Centre for Environmental Management and Sustainable Energy (CEMSE) has proposed a series of interventions aimed at mitigating an anticipated escalation in ex-pump prices of fuel in the first-pricing window of the month of June.
With international market prices projected to surge in the coming windows, CEMSE’s recommendations underscore strategic initiatives to alleviate the impending burden on consumers and businesses alike.
Firstly, CEMSE calls upon the Bank of Ghana to bolster its forex allocation for oil importers, advocating an increase from the current 25% to 80%.
This move aims to enhance stability by instructing importers to base fuel prices on the averages of auctioned dollars and prevailing market rates.
The projected outcome of this measure is a potential reduction of 50 pesewas per litre on either diesel or petrol, easing the strain on consumers at the pump.
Secondly, the institution urges the National Petroleum Authority (NPA) to consider deregulating the Unified Petroleum Price Fund (UPPF), allowing market forces to dictate transport prices.
By relinquishing control over UPPF, CEMSE anticipates a similar reduction of 50 pesewas per litre on petrol or diesel, providing further relief to consumers.
Additionally, CEMSE highlights disparities in LPG prices compared to petrol or diesel, attributing the variance to an NPA-introduced fee of $80/MT since April 2024.
The recommendation is for the regulator to halt the collection of this fee, potentially lowering LPG prices by approximately Ghc1.80 per kg.
Despite observations of declining international market prices for diesel, petrol, and LPG, CEMSE underscores the impact of Ghana’s currency depreciation against the US dollar.
As the Cedi depreciated by 3.06%, the organization foresees a surge in ex-pump prices commencing June 1st, 2024, primarily driven by currency fluctuations rather than international market dynamics.
CEMSE’s strategic proposals aim to navigate the impending challenges and safeguard against undue economic strain in Ghana’s fuel market.