The price of fuel has hit the GHS5 mark as of Monday, 17 September 2018 in line with the Institute for Energy Security’s prediction to that effect in the second pricing window of September 2018.

According to IES’ Research Analyst Mikdad Mohammed in a statement on Thursday, 13 September 2018, “While it remains a viable possibility that competition over market volumes could see some Oil Marketing Companies (OMCs) keep prices stable, the institute projects that fuel prices will cross GHS5 per litre”.

According to the release, every single indicator IES examined pointed to an increase in local fuel prices.

“Average Brent crude price is up by 6.2%; finished product prices have shot up by 1.64% and 5.01% for gasoline and gasoil, respectively. The cedi has depreciated by over 3% against the dollar within the period,” the statement indicated.

IES further entreated government to scrap some petroleum levies and taxes in order to save consumers from the effect of the price hike.

“It is our considered proposition that given how ineffective the Price Stabilisation and Recovery Levy (PSRL) under the National Petroleum Authority (NPA) has been in stabilising fuel prices at the pumps, there is the need for government to take a strong decision on scrapping the Special Petroleum Tax in the Price Build-Up (PBU) to provide relief to the Ghanaian public,” IES admonished.

On the performance of the local fuel market, IES said the first window in September saw prices of gasoline and gasoil remain unchanged, as it had projected earlier.

“Current national average prices of both gasoline and gasoil at the pump is GHS4.90 and GHS4.93, respectively. IES’ Market scan shows Fraga, Benab, Frimps Oil, Zen Petroleum, Lucky Oil, and Alinco Oil, among others, sell the lowest-priced fuel on the market relative to other OMCs”.

On the world oil market, IES stressed that as a result of the tightening of sanctions against Iran by the United States, analysts are projecting tighter oil markets between now and November, even as militancy in Libyan terminals have risen.

Average Brent crude price within the first pricing window has also shot up sharply from $73.03 to $77.52 per barrel. Prices of finished products based on Standard and Poor’s Platts Benchmark showed that gasoline and gasoil prices have shot up by 5.01% and 1.64%, respectively. Gasoil, which was previously selling for $653.33 per metric tonne is now trading at $685.32 per metric tonne. Gasoline is also selling at $747.23 per metric tonne, up from its previous lower price of $735.18 per metric tonne.

Local Forex and Fuel Stock

IES said the depreciation of the Ghana cedi by 3.03% within two weeks against the U.S. Dollar has not helped matters.

“The Cedi, which sold at GHS4.80 at the last window, is currently selling at GHS4.95. Despite initial challenges with a loading arm leakage and a TOR-Sahara inter-depot product transfer over the past pricing window that led to delays and change in discharge schedules, the country received 12,000 metric tonnes of LPG, 21,300 metric tonnes of gasoline, 30,000 metric tonnes of gasoil and 18,000 metric tonnes of ATK,” the release added.