The Institute for Energy Security (IES) has projected the rise in the price of fuel on the domestic market in December.

According to the Institute, the sharp increase is as a result of the 11.5% increase in prices of International Benchmark- Brent crude, the 6.94% increase in prices of Gasoline, the 7.26% increase in Gasoline prices and the stability of the local currency.

Also, the Institute said another reason for the increase is attributable to the renewed hopes of a COVID-19 vaccine following other announcements by major vaccine producers within the period.

Below is the full statement

FUEL PRICES TO GO UP IN DECEMBER

REVIEW OF NOVEMBER SECOND PRICING-WINDOW

Local Fuel Market Performance

Prices of fuel on the local market remained stable within the window under review. Prices of petroleum products within the second Pricing-window of November 2020 saw the majority of Oil Marketing Companies (OMCs) maintaining prices of Gasoline and Gasoil. The current national average price of fuel per litre at the pump is pegged at GHc 4.61

For this Pricing-window, Zen Petroleum, Benab Oil, Star Oil and Alinco Oil sold the lowest price per litre of Gasoline and Gasoil at the pump according to IES Market-Scan.

World Oil Market

Brent crude price within the period saw an increase in average price with the commodity being sold at $45.49 per barrel mark representing an 11.5% increase from the previous window’s average price of $40.54 per barrel mark. The increase is attributable to the renewed hopes of a COVID-19 vaccine following other announcements by major vaccine producers within the period. The period also saw the loosening of restrictions in parts of Europe that shored up prices for Brent. The seeming end to the US election drama also influenced the price of the Brent. Also, and more importantly, the hopes of an OPEC+ production cuts extension to at least the first quarter of 2021 saw a boost in bullish sentiments on the international market. The period recorded the highest price for the benchmark since early March this year, selling at $48.53 per barrel mark on Wednesday, 25th November 2020.

Finished products prices as monitored on Standard and Poor’s Global Platts platform show an increase in the prices of Gasoline and Gasoil on the global fuel market. Gasoline saw a 6.94% increase in prices closing the period at $412.00 per metric tonne from an earlier price of $385.27 per metric tonne. Gasoil prices also increased by 7.26% closing trading at the end of the period at $389.25 per metric tonne from a previous figure of $362.89 per metric tonne.

Local Forex

Data collated by IES Economic Desk from the Foreign Exchange (Forex) market shows the Cedi maintains its stability against the U.S. Dollar, still trading at an average price of Gh¢5.76 to the U.S. Dollar over the period.

PROJECTIONS FOR NOVEMBER 2020 SECOND PRICING-WINDOW

Due to the 11.5% increase in prices of International Benchmark- Brent crude, the 6.94% increase in prices of Gasoline, the 7.26% increase in Gasoline prices and the stability of the local currency; the Institute for Energy Security (IES) projects prices of fuel on the domestic market experiencing a sharp increase as we enter December 2020.

Signed:

Fritz Moses

Research Analyst, IES