The Executive Director of the Institute for Energy Policies Research (INSTEPR) in the Republic of Ghana, Kwadwo Nsafoah Poku, has expressed worry about the continuous depreciation of the Ghanaian cedi which is pushing prices of diesel and petrol upwards barely every two weeks in the Republic of Ghana.
Although crude oil prices have been hovering below $95 per barrel on the international market over the last month, the continuous depreciation of the Ghanaian cedi has pushed a litre of diesel to Gh15.99 and petrol at Gh¢13.10 per litre.
Sharing his opinion about the rising fuel prices and the continuous depreciation of the Ghanaian cedi against the major international currencies, Mr. Kwadwo Poku wrote: “We started the week with Gh10.45 to $$ on Monday. By Friday evening, some people were quoting GHc15 to $$. This means the cedi lost 1 cedi value daily. This situation is unprecedented. As I drove home on Friday from a meeting, I got the news that the oil companies are having difficulty pricing their products because they don’t know what forward $$ rate to use.
“I don’t want to scare you, but based on what happened last week, the fuel price will be Ghc20 cedis in the next window. If PURC is to review electricity, we will all have to pay 2x what we are paying today because in the last review they used Ghc7.45 to $$.
“If nothing is done to reverse the cedi from depreciating further, we will start Monday at Ghc15.42 cedis to $$. Do not let anyone tell you it’s speculation and not real. If the banks and Bank of Ghana have $$ for the oil companies, they will not go to the black market to buy the expensive speculated price,” he said.
Below is Kwadwo Poku’s piece
CAN WE SURVIVE ANOTHER WEEK LIKE THE LAST?
Most Ghanaians went through last week as if it was an ordinary week. Some people discussed the economic situation as usual at work, in the trotro and at the evening hang out. Seeing fuel price at Ghc15.99 was hard for everyone but as steadfast as we are, we took it in our strides.
We started the week with Gh10.45 to $$ on Monday. By Friday evening some people were quoting GHc15 to $$. This means the cedi lost 1 cedis value daily. This situation is unprecedented. As I drove home on Friday from a meeting, I got the news that the oil companies are having difficulty pricing their products because they don’t know what forward $$ rate to use.
I don’t want to scare you, but based on what has happened last week, fuel price will be Ghc 20 cedis in the next window. If PURC is to review electricity, we will all have to pay 2x what we are paying today because last review they used Ghc7.45 to $$.
If nothing is done to reverse the cedis from depreciating further, we will start Monday at Ghc15.42 cedis to $$. Do not let anyone tell you its speculation and not real. If the banks and Bank of Ghana has $$ for the oil companies, they will not go to the black market to buy the expensive speculated price.
Do you think we can go through this week losing 1 cedis a day as we did last week?? It’s not about God so let’s not say let’s pray.
The Banks, BDCs, OMC will not survive another week if what happened last week repeats itself. This scenario will translate differently to all of us. We can only survive this week to the next if something changes.
What is that change? Am only the energy expert.
Thanks
Kwadwo Nsafoah Poku
Director of INSTEPR