Fuel prices in Ghana to go up “marginally” – IES

“This is irrespective of the 2.5% appreciation of the Cedi against the dollar,” the IES said in its second pricing window forecast for April.

However, it said “while some OMCs could keep prices unchanged in order to maintain market share as part of the deregulation policy, most OMCs are likely to take advantage of the window to make up for previous ‘depressed’ margins.”

“On that note, IES wishes to conscientize Ghanaians to observe the displayed fuel price boards of the various OMCs before making purchases in order to benefit from the deregulation policy’s competitive pricing,” it added.

Below is the full forecast statement:

REVIEW OF FIRST PRICING-WINDOW OF APRIL

Local Fuel Market Performance

In the window under review, some select Oil Marketing Companies (OMCs) reviewed their prices downwards to maintain market shares, while largely prices stayed unchanged. Gasoil and Gasoline continue to be sold on average terms at GHc5.12 and GHc5.15 respectively. IES Market-Scan shows Star Oil, Pacific Oil, and Benab Oil sell the least-priced fuel on the market relative to other OMCs. Fuel from these outlets are 3% lower than the national average fuel price.

World Oil Market

An observation of the international oil market reveals Brent crude traded at an average price of $69.55 per barrel within the period under review representing an increment of 3.98% from a previous average trading price of $66.9 per barrel. Within the window, crude oil price peaked at $71.83 per barrel having hovered around $65 for several weeks. This is attributable to some developments around the world, including but not limited to the renewed clashes in Libya and OPEC production falls. OPEC production in March fell by 534,000 bpd, led by a massive 324,000-bpd reduction from Saudi Arabia, putting overall output at just below 9.8 million barrels per day (mb/d), below the 10-mb/d ceiling as part of the OPEC+ deal. In Standard and Poor’s Global Platts analysis, Gasoline prices went up 12.97% to close trading at $684.63 metric tonne, from a previous trading price of $606.02 per metric tonne; while Gasoil also increased by 1.42%. Selling at a previous price of $606.12 per metric tonne, it rose to close trading at $614.77 per metric tonne within the Pricing-window under review.

Local Forex

The Forex performance of the local currency Cedi against the U.S. Dollar for the window saw an improvement as the Cedi continues to appreciate following its recent recovery. Data gathered by IES Economic desk shows the cedi is currently trading at GH¢5.28; a clear 2.5% movement from the GH¢5.42 that heralded the last window.

PROJECTIONS FOR APRIL SECOND PRICING-WINDOW

Considering the fact that average Brent crude price has gone up by 3.98% with a corresponding 12.97% increment in the price Gasoline and 1.42% for Gasoil on the International market, the Institute for Energy Security (IES) foresees a slight increment in the price of fuel on the market. This is irrespective of the 2.5% appreciation of the Cedi against the dollar. While some OMCs could keep prices unchanged in order to maintain market share as part of the deregulation policy, most OMCs are likely to take advantage of the window to make up for previous ‘depressed’ margins. On that note, IES wishes to conscientize Ghanaians to observe the displayed fuel price boards of the various OMCs before making purchases in order to benefit from the deregulation policy’s competitive pricing.

Signed:

MIKDAD MOHAMMED

Research Analyst