OMCs expected to adjust upwards fuel prices at pumps

Oil Marketing Companies (OMCs) in country are expected to adjust upwards fuel prices at the various pumps starting February 15.

The anticipated price adjustments according to the Institute for Energy Studies (IES), is due to increments in the prices of Brent crude oil, gasoline and gasoil coupled with the appreciation of the cedi against the dollar.

Due to factors including the 5.09% increase in price of the International Benchmark- Brent crude, the 4.58% increase in price of Gasoil, the 4.82% increase in Gasoline price and the 0.17% marginal  appreciation of the local currency against the US Dollar; the Institute for Energy Security (IES) projects for an increase in price of fuel on the domestic market at the various pumps,” stated IES.

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Unlike in the first pricing-window of February 2021, in which a few OMCs increased marginally prices of fuel at the pumps, IES in its assessment of the market noted that it expects majority of OMCs in the country to increase prices of fuel at their respective pumps.

Local Fuel Market Performance  

Price of fuel on the local market remained largely stable within the window under review. Price of  petroleum products within the first Pricing-window of February 2021 saw few Oil Marketing Companies (OMCs) increasing their figures marginally close to the end of the window. The current national average  price of fuel per litre at the pump is pegged at Gh¢5.03.

For this Pricing-window, Zen Petroleum, Benab Oil, Petrosol and Frimps Oil sold the least-priced fuel on the local market according to IES Market-Scan.

World Oil Market

For the window under assessment, international benchmark, Brent crude price averaged about $58.59 per  barrel mark representing a 5.09% increase from the previous window’s average price of $55.75 per barrel  mark.

The Brent crude price increase is coming on the back of the tightening of markets due to recovering demand for oil products from particularly China, which put slight pressure on supplies and created backwardation in the market.

Also, other factors include the compliance by members of OPEC+ towards  their production cuts as announced last year, the voluntary additional cuts in production by Saudi Arabia,  a member of OPEC+, an increase in crude prices as delivered to Europe by Saudi Arabia and Asia and  lastly, the looming stimulus rollout in the United States.

Gasoline and Gasoil prices as monitored on Standard and Poor’s global Platts platform show that price of  the international commodities Gasoline and Gasoil experienced marginal increments. Gasoline saw an  increase in price by 4.82% to close the window at $526.75 per metric tonne from an earlier $502.50 per

metric tonne. Gasoil price also increased by 4.58% to close trading at $474.81 per metric tonne from  $454.00 at the end of the second pricing window of January 2021.

Local Forex

Data collated by IES Economic Desk from the Foreign Exchange (Forex) market shows the Cedi  improved on its stability against the U.S. Dollar by 0.17% trading at Gh¢5.78 to the US Dollar.

Projections for February 2021 Second Pricing-Window

Due to factors including the 5.09% increase in price of the International Benchmark- Brent crude, the 4.58% increase in price of Gasoil, the 4.82% increase in Gasoline price and the 0.17% marginal  appreciation of the local currency against the US Dollar; the Institute for Energy Security (IES) projects  for an increase in price of fuel on the domestic market at the various pumps as we continue into, February 2021.

For the majority of OMCs that maintained their prices at the pump within the last window, we expect to  see an increment this window taking into consideration the international changes in prices over the period.