Fuel prices in the Republic of Ghana are expected to go up higher by between 60 and 70 pesewas in the first pricing window in March 2022, following a jump in the price of international benchmark crude Brent to US$103.3 per barrel on Thursday, February 24, 2022.
The West Texas Intermediate WTI traded around US$93.50 per barrel on Wednesday while Brent was trading around US$97.51 per barrel.
Surprisingly, the price of both WTI and Brent jumped on Thursday morning following the Russian troop invasion into Ukraine which is limiting fuel supply to the market.
Currently, both petrol and diesel are sold between GHS7.88 and GHS 7.99 on the local market.
During the second pricing window which began on February 16, 2022, some Oil Marketing Companies (OMCs) increased fuel prices by between 50 pesewas and 58 pesewas at the time Brent crude sold around $95 per barrel.
Analysing the effects of Russia’s attack on Ukraine which has already driven crude oil prices above $100 and Ghana’s weak currency, the cedi, a litre of petrol and diesel will likely be sold more than GH¢8.50 during the first pricing window in March.
Speaking to ebergynewsafrica.com about the soaring crude oil prices, Executive Director of Institute for Energy Security IES, Nana Amoasi (VII) said: “The rise in international prices and a decline in the value of the local currency will impact negatively on the prices of domestic fuel, as a result of the price and forex exposures.
“In Ghana, any additional increase in the price of, let’s say, gasoline and diesel will compound the inflationary pressures we are currently seeing.”
Nana Amoasi (VII) urged the government to act quickly to arrest any increases at the pump, come to the next pricing window.
Suggesting what could be done to cushion consumers, he said in the immediate term, the government can resort to either taking off or suspending some of the tax/levy/margin components on the petroleum price build-up. This may be a loss of revenue to the government but it can easily be compensated for by the windfall of revenue from the sale of Ghana’s share of indigenous crude sales.
He added, “And in the mid-to-long term, the BOST and TOR system must work to manage not only the risk associated with price increases on the world market, but also manage any form of supply risk.”
Source: https://energynewsafrica.com