IES forecasts further 5% and 4% hike in petrol, diesel prices over Middle East crisis, Cedi depreciation

The Institute for Energy Security (IES) is expectant of a further 5% and 4% increment in the pump prices of petrol and diesel in the second-pricing window of the month of April – which starts Monday, April 15, 2024.

According to the IES, geopolitical tensions in the Middle East between Iran and Israel, OPEC+ decisions on production cuts, depreciation of the cedi as well as policy changes and directives such as the reversal of the suspension of the Price Stabilization and Recovery Levy (PSRL) by the National Petroleum Authority (NPA), account for the anticipated hike in fuel prices.

Despite the projected uptick in petrol and diesel prices for the second pricing window of April, the price of Liquified Petroleum Gas (LPG) is, however, expected to significantly fall by some 8%.

“Following the international market changes resulting from geopolitical tensions in the middle east, OPEC+ decisions on production cuts among other factors that has caused a hike in crude oil prices which influences refined product price.

“Liquid fuels price has continued its rise in a row over the past 2 pricing-windows with April first pricing-window recording 7.27% and 0.69% respectively. Ghana’s economic turmoil continue to put pressure on the local currency leading to its persistent depreciation since February 2024 with the latest being 2.43% in the April first pricing-window,” remarked Adam Yakubu, Research Analyst with the IES.

“National Policy changes and directives from the National Petroleum Authority (NPA) has affected the local market in the last pricing period and its likely to continue in the second half of April as some OMCs attempt to incorporate the new changes to their operations.

“Going into the second half of April, Gasoline and Gasoil prices are projected to further increase by about 5% and 4% respectively as result of international market dynamics and poor performance of the local currency. LPG on the contrast could see its users enjoy some price cuts by about 8% in the coming days in the month of April 2024,” he stated further.

In April, the first pricing-window saw the domestic fuel market experience turbulence spanning from regulatory directives and international market dynamics. The National Petroleum Authority reversed an earlier decision to suspend the price stabilization levy as a component of the price build-up for refined petroleum products.

In reaction to the above decision, Oil Marketing Companies (OMCs) reviewed prices upward after an earlier increase due to market dynamics of international price movements and a depreciating local currency.

Monitoring activities on the local fuel market revealed some OMCs had increased prices twice within 24 hours. The average price increase for the Gasoil for the period under review was GHC0.25, whereas Gasoline is GHC0.30, Liquified Petroleum Gas price remained unchanged.

The Institute for Energy Security (IES) computation of national average price for the 3 refined petroleum products over the past two weeks indicate, Gasoline sells at GHC13.54, Gasoil GHC14.26 per litre respectively, and Liquefied Petroleum Gas (LPG) sells at GHC13.65 per kilogram (kg).

The IES Marketscan positions Star Oil, Zen Petroleum, and Benab Oil as OMCs selling at least priced over the last two weeks.

Source: Norvanreports