Ghana to kick off New Year with fuel price increment

The Institute for Energy Security (IES) has predicted a “marginal” increment in fuel prices on the local market “taking into consideration the 4.07% increment in prices of Crude oil as well 4.59% and 5.05% increment in the prices of Gasoil and Gasoline on the international market respectively.”

In a statement, IES said it “foresees prices of fuel on the local market potentially increasing marginally despite the cedi recording some marginal gains against the dollar within the period. However, the increases could be averted or its impacts minimized if the National Petroleum Authority (NPA) applies the Price Stabilization and Recovery Levy (PSRL).”

Below is the IES statement:

EXPECT FUEL PRICES TO GO UP IN THE NEW YEAR

REVIEW OF DECEMBER 2019 SECOND PRICING-WINDOW

Local Fuel Market Performance

Prices of petroleum products remained largely stable as predicted by the Institute for Energy Security (IES) in the Pricing-window under review. Fuel prices within the second Pricing-window of December 2019 saw majority of the Oil Marketing Companies (OMCs) maintaining the prices of Gasoline and Gasoil unchanged. The current national average price of fuel per litre at the pump is pegged at GH¢5.36 for both Gasoline and Gasoil.

For the Pricing-window under review, Zen Petroleum, Benab Oil, Pacific, SO Energy and Alinco Oil sold the least-priced Gasoline and Gasoil on the local market relative to others in the industry, according to IES Market-scan.

World Oil Market

Crude oil prices continue to remain above the $60-dollar margin for this window as an Analyst Poll by the Wall Street Journal suggested prices will remain relatively stable at current levels at least during the first quarter of the New Year despite OPEC’s deeper production cuts. The overall sentiment on oil prices seems to be leaning towards the bearish. On Average, Brent crude rose marginally from $62.87 per barrel to close at $65.43 per barrel; thus recording an increased change of 4.07%

According to Standard and Poor’s Global Platts benchmark for fuels, Average Gasoline Price increased by 5.05% to close at $620.11 per metric tonne, from a previous average of $590.32 per metric tonne; while Gasoil increased by 4.59% to close trading at $607.34 per metric tonne from a previous $580.70 per metric tonne.

Local Forex

Data collated by IES Economic Desk from the Foreign Exchange market show the Cedi made some very marginal gains against the US Dollar within the period, after showing weakness in the previous window. The Cedi traded at an average price of Ghs5.65 to the US Dollar over the period under review, from a rate of Ghs5.71 recorded in the second window of December 2019. The rate of appreciation recorded against the US Dollar is 1.05%.

PROJECTIONS FOR JANUARY 2020 FIRST PRICING-WINDOW

Taking into consideration the 4.07% increment in prices of Crude oil as well 4.59% and 5.05% increment in the prices of Gasoil and Gasoline on the international market respectively; the Institute for Energy Security (IES) foresees prices of fuel on the local market potentially increasing marginally despite the cedi recording some marginal gains against the dollar within the period. However, the increases could be averted or its impacts minimized if the National Petroleum Authority (NPA) applies the Price Stabilization and Recovery Levy (PSRL).

Source: Daily Mail GH