European Union’s Landmark Proposal To Label Natural Gas As ‘Green’ Energy Is Good For Africa –AEC
Africa’s call for a just and inclusive energy transition has been answered through the European Union’s landmark proposal to label natural gas as a ‘green’ energy source.
Historically, Africa has always fought for sustainable development because we know, first-hand, the ravaging effects that even minute changes in climate can have on the continent and its populations. But to develop sustainably, Africa must first industrialize itself. It must have the same opportunities as Europe and other western countries. The point that natural gas serves as a transitional energy source is one that has been promoted by African nations for a long time and therefore, the African Energy Chamber hails the EU’s proposal as a landmark development that justifies a positive outlook for an inclusive energy transition.
It has taken a crisis in energy availability to bring about policies that could increase Africa’s energy supply. The current pressure from The West to acclimatize to cleaner energy systems has so far been exclusive in recognizing that the transition may differ in form and timing from one region to another. By restricting investment into energy sources, such as gas, Africa has stood the chance of being left behind during the energy transition, which is counterproductive and regressive.
“We have had our disagreements with our European friends, however, there has always been constructive, behind-the-scenes dialogue with European policy makers. They listened, worked, and let us make the case for Africa’s low-carbon LNG and these discussions have been critical in getting us to see eye-to-eye on gas, a lot of work still needs to be done to make this a reality” stated NJ Ayuk, Executive Chairman of the African Energy Chamber, who added, “The demonization of Africa’s gas industry needs to stop, and investments need to come into the sector. While we continue this engagement, it is important that the oil and gas industry focuses its investment on further reducing carbon emissions within the gas value chain. Sustainable development and making energy poverty history will require Africa to increase gas within its energy mix, which will give us a fighting chance to reduce the continent’s carbon footprint, even when we are still under 4% of global emissions.”
Africa faces unique challenges and must be allowed to time its own energy transition according to its own needs. The proposal to label natural gas as ‘green’ energy is what a just energy transition looks like, and now, we need to finance it. To capitalize on this, the African Green Energy Summit, to be held at African Energy Week this year, will clearly outlined initiatives and positions ahead of this year’s COP27.
Now, at the dawn of a new year, Europe and Africa can collaborate and cooperate and stride in allegiance towards a brighter future. The two continents can set aside their differences and strive towards sustainable development together, paving the way for a new approach to Africa’s energy industry, one that serves the whole world and all its people as opposed to a privileged few. Should most EU members back the proposal, then it will become law from 2023, which the African Energy Chamber hopes will stand to help the U.S. recognize natural gas as a clean fuel, which it unfortunately does not under the Biden Administration’s current clean power plans.
This new proposal will pave the way for new European investments in natural gas in Africa and will therefore allow Europe to unlock billions of euros in finance and sustainable energy funds to support gas as a transitional energy source. The EU will want to import whatever natural gas Africa develops, which is constructive for project funding and will open doors to have candid discussions about furthering energy availability across the continent.
Some countries, like Senegal, Mozambique, South Africa, Tanzania, Nigeria, Angola, Ghana, Mauritania, Libya, Cameroon, Algeria, and Equatorial Guinea, have taken steps to monetize their natural resources to develop and industrialize independently. Thus, we need to give them time to realize the benefits of their strategic efforts and facilitate their own sovereignty when adhering to the energy transition. By using natural gas as a feedstock to create other value-added products, like petrochemicals, from fertilizers to ammonia, revenue can be used to build infrastructure, from pipelines to ports and roadways, and we can therefore open the doors to economic diversification for other African countries as well.
“Despite predictions that demand for African LNG is expected to grow for the foreseeable future, investments in gas exploration have been hit hard by a short-sighted bias against our low-carbon natural gas resources. This has led to a reluctance towards investing in supply projects because of the fractured global outlook towards natural gas,” continued Ayuk, concluding that, “African nations must be more pragmatic. If exploration and production companies must wait one or two years before their proposed projects are sanctioned, then the prospects for a sustainable African energy future will diminish rapidly. These practices, which help protect the interests of oil-producing nations, made sense when crude sold for $100 per barrel and before the energy transition took center stage, but they don’t make sense now.” Concluded Ayuk
While the African Energy Chamber hails the proposal as a win for Africa, it is not a time to regress to the continent’s old ways. Now is the time for African oil and gas producers to do everything in their power to encourage as much exploration and production activity as possible, particularly through International Oil Companies, National Oil Companies and African Independents. In the long term, African producers of oil and gas will continue to rely on the industry’s revenue to sustain economic growth and guarantee a just and inclusive energy transition, and should lobby for knowledge transfers, training, gas monetization programs, and other strategic opportunities so that their oil and gas operations can create pathways towards sustainable development and diversification.
Source: https://energynewsafrica.com
Nigeria: I Am Not Happy With The State Of Power In Nigeria–Prez Buhari
The unreliable and poor power supply situation in Nigeria, Africa’s most populous country, is one of the myriads of problems giving the country’s leader, H.E Muhammadu Buhari, a sleepless night.
President Muhammadu Buhari, who is unhappy about the current situation, said: “I am not because I identify that no country can develop without infrastructure and infrastructure means road, rail and power,” President Buhari said in response to a question to him during an interview with Channels Television on Wednesday, January 5, 2022.
Nigeria can produce 13,000 megawatts of electricity but currently, West Africa’s Africa’s most populous nation produces just 4,000 megawatts on the national grid.
According to President Buhari, his administration is working hard to provide infrastructure for Nigerian including improving electricity.
The President also shared more light on why the electricity supply is yet to be stable in the country.
While noting that the Transmission Company of Nigeria (TCN) is 100 per cent government-owned, he said his government inherited the Distribution Companies (DisCos).
According to the President, the owners of Discos bought them based on geo-political zones rather than merit.
He added, “The people that own them, who are they? They are not electrical engineers; they don’t have money; it is just a political favour.
“To remove a system and reintroduce one is no joke. Luckily, we have the TCN and that is the transmission. If we can get our technology right, we will cut the cost on transmission and the likelihood of sabotaging the lines and so on.”
Source: https://energynewsafrica.com
Ghana: GOIL Adjusts Fuel Prices By 5 Pesewas, Shell Maintains Prices
Ghana’s leading oil marketing company, GOIL Company Limited, has adjusted its fuel prices at the pump by five pesewas.
As of Wednesday, GOIL Company Limited was selling both Super XP and Diesel XP at Gh¢6.65 per litre.
It is not clear whether Shell, which is one of the leading Oil Marketing Companies, will adjust its fuel prices upward as GOIL and TotalEnergies have done.
Currently, TotalEnergies is the only OMC selling Super and Diesel at Gh¢ 6.80 and gh¢6.85 per litre respectively.
GOIL and Shell are selling at Gh¢6.65, 20 pesewas lower than TotalEnergies.
Some OMCs like Frimps Oil is selling a litre of diesel and petrol at Ghc6.27 per litre while Pacific sells at Ghc6.29 per litre.
Frimps sells at GHc6.43 per litre.
Earlier this week, COPEC predicted that the ex-pump prices of petrol and diesel would surge by 3.7 per cent and 2.5 per cent respectively on the local market.
“In nominal terms, ex-pump prices of petrol and diesel are expected to increase by 24 pesewas and 17 pesewas respectively.
“The average surge for both products in nominal terms is 20 pesewas, representing 3.1 per cent. Some OMCs could increase their prices less than the 20 pesewas due to competition,” COPEC concluded in a statement.
Source: https://energynewsafrica.com
Ghana: Gov’t Suspends Price Stabilisation & Recovery Levy For Another One Month
The Government of Ghana has extended the two months’ suspension of the Price Stabilisation and Recovery Levy (PSRL) to one more month.
The PSRL is one of the tax components of the petroleum price build-up in the Republic of Ghana.
Consumers pay 16 pesewas as PSRL on a litre of petrol and 14 pesewas on a litre of diesel and a kilogramme of LPG.
President Akufo-Addo directed the country’s petroleum downstream regulator, NPA, to suspend the PSRL for two months from November to the end of December 2021.
The move was intended to cushion Ghanaians from the rising cost of fuel on the local market as crude oil prices on the world market continued to skyrocket.
In October, International Benchmark Brent hit $86 per barrel.
The PSRL was expected to be reintroduced in January 2022.
However, the Communications Manager at NPA, Kudus Mohammed said the government has extended the suspension of the Price Stabilisation and Recovery Levy to the end of January 2022.
Meanwhile, some Oil Marketing Companies (OMCs) had already adjusted their fuel prices at the pump with TotalEnergies currently selling super at Gh¢6.80 per litre while diesel is sold at Gh¢6.85 per litre from an earlier GHc6.65 per litre for both products.
Source: https://energynewsafrica.com
Nigeria: Electricity Consumers Won’t Tolerate Poor Services In 2022-Adetayo
Electricity Consumers in Nigeria, Africa’s most populous country, are hoping that electricity distribution companies will improve upon their service in 2022.
Almost half of the over 210 million people are without electricity from the country’s grid and resort to other means to provide light for their homes.
Interestingly, even those who are connected to the national grid hardly enjoy a stable and quality electricity supply.
Expressing the frustrations of electricity consumers in Nigeria and what is expected of the distribution companies, Adetayo Adegbemle, Executive Director of PowerUp Nigeria, a consumer advocacy group, took on IBEDC for treating its customers poorly.
He sarcastically thanked IBEDC for bringing light at 12:13 am and taking it by 5:23 am in some of its franchise areas.
“While people and places are enjoying nearly 24 hours in other state capitals, this is probably the best you could do in Ibadan.
“You don’t even have the decency to allow people to celebrate Christmas and New Year with some dignity,” he fumed.
He added: “This is 2022. If you need help, please let go of the areas you cannot serve; same advice goes to all other Discos as well. And I pray that we get regulators who are willing and ready for reforms.
“This charade of service provisioning has to stop,” he concluded.
Source: https://energynewsafrica.com
NBET’s Monopsony: The Drawbacks Of Single Buyer Model In Nigeria Electricity Market
Recently, there were stakeholders’ engagements organized by the Nigerian Electricity Regulatory Commission [NERC] on whether to renew the Nigerian Bulk Electricity Trading license. This generated lots of arguments for and against among the industry stakeholders and market participants. Though not confirmed, there is a rumour that NBET’s license has been extended for another three years.
Though Nigeria has partially liberalized her electricity market with the unbundling of the old NEPA, there still exists a monopoly in wholesale electricity trading as evident in the single buyer model of the wholesale market where NBET- a state owned entity is the single buyer.
The Nigerian Bulk Electricity Trading Plc (NBET) was established to purchases electricity from the generating companies through Power Purchase Agreements (PPAs) and sell to the distribution companies through Vesting Contracts.
NBET was established to increase investors’ confidence in the Nigerian Electricity Supply Industry- (NESI) by shielding the Gencos – and by extension, protecting the natural gas producers from market risks. However, NBET has been unable to shield Gencos and gas producers from the liquidity crisis that has plagued the industry.
Not only has NBET’s mission proved unsustainable as it has never for a time been able to fulfil its obligations to the Gencos, its inhibitive monopsony has curtailed investments in the sector.
The single buyer model started in the 1990s mostly among the developing nations. The essence was to increase generating capacity by authorizing private investors to build power plants to generate and sell power to the national grid. The generated power is sold through a long term power purchase agreements- PPAs which include take-or pay and capacity charges to protect investors from market risks.
This model is supposed to be a transitional arrangement before the conditions for a competitive wholesale markets are satisfied. The reality of the liquidity problems this model has created in the Nigerian power sector shows this is no longer sustainable, and the much awaited conducive time for the market to transit to a more competitive one may never come.
The single buyer model has many drawbacks especially in a nation like ours where there is weak regulation, corruption, and lack of any credit policy to mitigate counterparty risk in the power sector.
First, power purchase agreements-PPAs in single buyer model creates a contingent liability for the government whenever NBET is unable to honour its obligation to the power generating companies. This has been the case in our market because the distribution companies-Discos hardly remit up to 40% of energy sold to them due to their high ATC&C loss. This was why the federal government had to release 1.3trillion naira Payment Assurance Guarantee to the sector. This payment was inevitable because of formalized guarantee agreements and a breach would have undermined the government’s creditworthiness. This is a huge sum the country would have spent on health, education, or roads.
Second, this model weakens the motivations for power distribution companies to collect and remit payments from the customers. The state owned- NBET won’t dare take a politically unpopular action against any delinquent distribution companies as the government still retains 40% ownership in these companies. Over the years, collections and remittance by all the Discos have been abysmal and when the few performing Discos see that there is no repercussion for the poor performing ones, the incentive to improve collections weakens. Though the Vesting contracts between NBET and the Discos are backed by some sorts of payment guarantees, but there is no evidence of those guarantees being enforceable.
Third, this model makes it easy for the government and some influential parties to influence or intervene in the dispatch of generation. The guideline for economic merit order dispatch mandates the hydro plants to be utility must run generation. It is weird that the most expensive thermal plant in our generation portfolio has a dispatch rate higher than some hydro plants.
When Azura-Edo IPP began ramping up its electricity sale volumes, there was a simultaneous winding down of electricity sale volumes from the state-owned Niger Delta Power Holding Company (NDPHC). Today, we have many NIPPs lying dormant and has been put up for sale by Bureau of Public Enterprise-BPE because NBET lacks the fiscal capability to enter into power purchase agreements with them.
Fourth, decisions about adding more generation capacity are often made by government officials who do not have to bear financial consequences of their actions. Where investors who have backers in government find government assurance attractive, there is always a bias to increase generation capacity. Our installed generation capacity is about 13,500MW but our baseload demand hovers around 3500-4500MW and peak demand has not exceeded 5800MW. Despite the stranded capacity of about 8000MW, there are still several calls for increased generation. With assured capacity payments for the existing stranded capacity, it is not economically wise and sustainable for NBET to continue to be the sole buyer in the wholesale market.
Lastly, this single buyer model increases the probability that under pressure from vested interests, government will indefinitely delay the next step towards a fully liberalized electricity market. It is not surprising that many clamoured for the renewal of NBET’s license making excuses of financial non-viability of the Discos and non-readiness of the market for full competition.
The government tried to address the challenges associated with the single buyer model with the introduction of Eligible Customers’ Regulation. This was aimed at allowing the creditworthy large users like industrial customers and residential estates to buy electricity from the generators through bilateral contracts. Sadly, we haven’t progressed with this policy due to many reasons.
Allowing power generators to sell electricity directly to distribution companies and eligible customers eliminates most of the drawbacks of single buyer model. Though the bilateral contract model also poses some challenges because even with the best forecast and load analysis, electricity generation and consumption of sellers and buyers hardly match the contracted amounts. A balancing market administered by the System Operator is to be created to maintain balance at real time.
It is inevitable that the Nigerian electricity market needs to transit to bilateral contracts and allow full competition in the wholesale market.
The generating companies are hemorrhaging with huge debts and as long as they can’t sell their stranded capacity or get paid for energy sold as at when due- government’s bail out becomes inevitable to avoid total collapse of the industry. There exists in the market unmet and unfulfilled energy demand by many industrial and commercial customers who presently rely on captive generation.
The regulator-NERC has to be brave and allow competition in the wholesale market for Discos and these creditworthy large electricity users to contract bilaterally with the Gencos, otherwise- the government may still be providing subsidy for the cash trapped power sector.
Lanre Elatuyi- Electricity Market Analyst.
[email protected]
OPEC Appoints Haitham Al-Ghais As New Secretary-General
The Organisation of the Petroleum Exporting Countries (OPEC) has voted to appoint Kuwaiti candidate Haitham Al-Ghais as its new Secretary-General.
In a statement, the oil cartel said Al-Ghais was selected at a special meeting of the Conference of OPEC held via videoconference on Monday, January 3, 2022.
He will replace Mohammad Sanusi Barkindo, a Nigerian representative, when his second term as OPEC Secretary-General ends in July 2022.
“By Article 28 of the OPEC Statute and the application of the procedure decided at the 182nd Meeting of the Conference on 1 December 2021, the Conference decided by acclamation to appoint Mr Haitham Al-Ghais of Kuwait as Secretary-General of the Organization, with effect from 1 August 2022, for three years,” the statement explained.
Mr Al-Ghais, a veteran of the Kuwait Petroleum Corporation (KPC) and Kuwait’s OPEC Governor from 2017 to June 2021, currently serves as Deputy Managing Director for International Marketing at KPC.
He chaired the Joint Technical Committee (JTC) of the Declaration of Cooperation (DoC) in 2017 and subsequently served as a member of the JTC until June 2021.
According to the statement, the Conference of OPEC expressed its appreciation to Barkindo for his leadership during his two-term tenure as Secretary-General from August 1, 2016, to July 31, 2022.
“A long-serving veteran of Nigeria’s oil industry and OPEC, Mr Barkindo, has been instrumental in expanding OPEC’s historical efforts to support sustainable oil market stability through enhanced dialogue and cooperation with many energy stakeholders, including the landmark DoC since its inception in December 2016,” the statement said.
“These efforts are widely credited with helping to stabilize the global oil market since the unprecedented market downturn related to the COVID-19 pandemic, and providing a platform for recovery.
“Before being appointed Secretary-General, Mr Barkindo held several key roles at OPEC between 1986 and 2010, including as Acting Secretary-General in 2006. He is known internationally for helping to produce the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol as the leader of Nigeria’s technical delegation to the UN negotiations in 1991.
“He has remained a key contributor to the UNFCCC process, including most recently at the 26th Conference of Parties (COP) meeting in Glasgow in October and November 2021.”
Source: https://energynewsafrica.com
Zimbabwe: Electricity Tariff Goes Up By 12.3 %
Electricity consumers in Zimbabwe will be paying more for electricity effective January 1, 2022.
Consumers will now pay as much as 12.3 per cent more, according to Zimbabwe’s Energy Regulatory Authority (ZERA), citing section 53 of the Electricity Act.
According to a report by esi-Africa, families on pre-paid meters, who buy 200 units of electricity per month, will pay $1265.11 including the six per cent rural electrification levy, up from just under $1127.
There are five bands of discounted tariffs before the full $14.31 a unit comes into effect on all purchases over 400 units, although consumers can only have the advantage of the discounts on their first purchase each month. Subsequent purchases are charged at the full price.
The first 50 units cost $2.38 each, before the rural levy. So the full 50 will cost a domestic consumer on a pre-paid meter $126.14 including the rural electrification levy.
The 50 units are considered the bare minimum that a family needs for essential purposes and assume that they do not heat water for washing with electricity.
Consumers on post-paid meters will pay similar charges plus an additional $35.68 monthly fixed charge. The fixed charge covers the extra administration costs with a meter that is not prepaid and, at times, the complications and costs of recovering a bad debt.
Source: https://energynewsafrica.com
Ghana: TotalEnergies Increases Fuel Prices
TotalEnergies, one of the leading Oil Marketing Companies (OMCs) in the Republic of Ghana, has adjusted prices of super and diesel at its fuel retail outlets across the West African nation.
As of Monday morning, super (petrol) is being sold at Gh¢6.80 per litre; up from Gh¢6.65 per litre during the second pricing window in December 2021 while diesel is sold at Gh¢6.85 per litre.
This means TotalEnergies has increased super (petrol) by 15 pesewas while the price of diesel has been increased by 20 pesewas.
It is likely other Oil Marketing Companies will adjust their fuel prices at the pump this week.
Currently, GOIL, the leading indigenous (OMC), sells both petrol and diesel at Ghc6.60 per litre.
Other OMCs like Shell sells both petrol and diesel at Ghc6.60 per litre while Petrosol and Zen sell at Gh¢6.64 and Gh¢6.37 respectively.
In October 2021, Ghana’s President Nana Akufo-Addo intervened by directing the country’s petroleum downstream regulator, NPA, to zero rates the Price Stabilisation and Recovery Levy (PSRL) for November and December 2021.
The PSRL is expected to be reintroduced this month, January.
As of Monday morning, West Texas Intermediate (WTI) was selling at $75.79 per barrel while International Benchmark-Brent sold at $78.39 per barrel
Source: https://energynewsafrica.com
Ghana: Fuel Prices To Shoot Up By 18 Pesewas…IES Predicts
Fuel prices at the local market are expected to witness a marginal increase in the first pricing window of January 2022.
GOIL and TotalEnergies, which are the market leaders, currently sell both petrol and diesel at Ghc6.60 per litre and Ghc6.65 per litre respectively at the pump.
Other OMCs like Shell sells both petrol and diesel at Ghc6.60 per litre while Petrosol and Zen sell at Ghc6.64 and Ghc6.37 respectively.
However, Ghana’s energy think tank, Institute for Energy Security, predicts these prices would shoot up marginally because of the 8.18 per cent increase in the price of the International Benchmark-Brent crude- as well as the poor performance of the Ghanaian cedi against the US dollar.
Apart from the above, the government is also expected to reintroduce the Price Stabilisation and Recovery Levy (PSRL) after President Akufo-Addo directed the country’s downstream regulator, NPA, to zero rates it for two months to cushion consumers from the high cost of fuel.
“For the January first Pricing-Window, the 8.18 per cent increase in the price of the International Benchmark- Brent crude- the 3.25 per cent increase in the price of gasoline, the 2.09 per cent increase in gasoline price, the 0.5 per cent depreciation of the cedi against the US dollar and the reintroduction of the PSRL; the Institute for Energy Security (IES) projects for the price of fuel on the domestic market at the various pumps to increase by at least GHp18, representing a 2.8 per cent increase,” a statement from IES signed by Research Analyst Fritz Moses said.
Below is the full statement issued by IES
REINTRODUCTION OF THE PRICE STABILIZATION AND RECVOERY LEVY (PSRL) TO PUSH FUEL PRICES UP IN THE NEW YEAR
REVIEW OFDECEMBER SECONDPRICING-WINDOW
Local Fuel Market Performance
The price of fuel on the local Ghanaian market experienced a marginal decrease within the window under assessment. Price of petroleum products at the beginning of the second Pricing-window od December 2021 saw majority of the Oil Marketing Companies (OMCs) reduce their prices at the pump by 1.5%. The current National Average price for both products is pegged at Gh¢6.50 per litre, a 1.21% reduction from the previous window’s price of Gh¢6.58 per litre.
The IES Market-Scan picked Benab Oil, PetroSankofa, Star Oil, Goodness Oil and Top Oil as the OMCs with the least-priced fuel on the local market for the window under review. Prices of these OMCs ranged between Gh¢6.330 and Gh¢6.47per litre for both products.
The OMCs with the highest priced were Semanhyia (Gh¢6.70), Engen, Total, Shell (Vivo) and Puma, all selling at Gh¢6.65 per litre for all products.
World Oil Market
The International Benchmark Brent Crude saw its price rise within the period with prices selling on average at about $74.75 per barrel, representing an increment of 8.18% from the previous window’s average price of $69.10 per barrel.
For this pricing-window, the spike in cases of the pandemic, led mainly by the Omicron variant of the virus sparked some fear of demand destruction among traders. The rapidly growing number of Omicron cases worldwide has raised concerns about another period of sluggish demand. Currently, Omicron has already established itself as the main COVID strain in the United States, and nearing the dominant strain status in many European countries as well.
Despite early indications that Omicron will be less severe by the World Health Organization (WHO) and other allied agencies and institutions, the market will need to wait out this period of negative news before reclaiming its positive mood and return fully to the prices prior to the announcement of the variant.
The markets reacted to the news within the window, causing prices to tumble from above $75 per barrel to reach near $70 per barrel.
Within the same period, the supply issues with the Libyan crude influenced traders’ reaction on the markets, forcing prices to prop-up. The situation only forced a temporary support for oil producers as prices increased with the skirmishes in Libya, leading to a force majeure on oil exports and providing some upward pressure on prices.
The news of US crude oil inventories apparently falling for the fourth week in a row also caused some changes in the oil market. The falling U.S. oil inventories as announced by the American Petroleum Industry further propped-up oil prices.
The price of the refined products, Gasoline and Gasoil prices as monitored on Standard and Poor’s global Platt’s platform however experienced marginal changes within the period. The price of Gasoline increased by 3.25% to close the window at $707.75per metric tonne from its earlier price of $685.68per metric tonne. Price of Gasoil also increased within the period by 2.09%to close trading at $641.38per metric tonne from its earlier price of $628.28per metric tonne in the previous window.
Local Forex
Data monitored by the IES Economic Desk from the Foreign Exchange (Forex) market shows that the Cedi depreciated further against the U.S. Dollar by 0.5% in the just ended pricing window to close trading Gh¢6.24 to the US Dollar from the previous window’s rate of Gh¢6.21 to the US Dollar.
PROJECTIONS FOR JANUARY 2022FIRSTPRICING-WINDOW
For the January First Pricing-Window, the 8.18%increase in the price of the International Benchmark- Brent crude, the3.25% increase in price of Gasoline, the 2.09% increase in Gasoil price, the 0.5 per cent depreciation of the cedi against the US Dollar and the reintroduction of the PSRL; the Institute for Energy Security (IES) projects for price of fuel on the domestic market at the various pumps to increase by at least GHp18, representing a 2.8% increase.
For this pricing-window, the spike in cases of the pandemic, led mainly by the Omicron variant of the virus sparked some fear of demand destruction among traders. The rapidly growing number of Omicron cases worldwide has raised concerns about another period of sluggish demand. Currently, Omicron has already established itself as the main COVID strain in the United States, and nearing the dominant strain status in many European countries as well.
Despite early indications that Omicron will be less severe by the World Health Organization (WHO) and other allied agencies and institutions, the market will need to wait out this period of negative news before reclaiming its positive mood and return fully to the prices prior to the announcement of the variant.
The markets reacted to the news within the window, causing prices to tumble from above $75 per barrel to reach near $70 per barrel.
Within the same period, the supply issues with the Libyan crude influenced traders’ reaction on the markets, forcing prices to prop-up. The situation only forced a temporary support for oil producers as prices increased with the skirmishes in Libya, leading to a force majeure on oil exports and providing some upward pressure on prices.
The news of US crude oil inventories apparently falling for the fourth week in a row also caused some changes in the oil market. The falling U.S. oil inventories as announced by the American Petroleum Industry further propped-up oil prices.
The price of the refined products, Gasoline and Gasoil prices as monitored on Standard and Poor’s global Platt’s platform however experienced marginal changes within the period. The price of Gasoline increased by 3.25% to close the window at $707.75per metric tonne from its earlier price of $685.68per metric tonne. Price of Gasoil also increased within the period by 2.09%to close trading at $641.38per metric tonne from its earlier price of $628.28per metric tonne in the previous window.
Local Forex
Data monitored by the IES Economic Desk from the Foreign Exchange (Forex) market shows that the Cedi depreciated further against the U.S. Dollar by 0.5% in the just ended pricing window to close trading Gh¢6.24 to the US Dollar from the previous window’s rate of Gh¢6.21 to the US Dollar.
PROJECTIONS FOR JANUARY 2022FIRSTPRICING-WINDOW
For the January First Pricing-Window, the 8.18%increase in the price of the International Benchmark- Brent crude, the3.25% increase in price of Gasoline, the 2.09% increase in Gasoil price, the 0.5 per cent depreciation of the cedi against the US Dollar and the reintroduction of the PSRL; the Institute for Energy Security (IES) projects for price of fuel on the domestic market at the various pumps to increase by at least GHp18, representing a 2.8% increase.
Source: https://energynewsafrica.com
2021 Closes With Crude Oil Prices Below $80
Crude Oil prices closed in the year 2021 at below $80 per barrel after going above $80 per barrel in the last quarter of the year.
At the beginning of January 2021, West Texas Intermediate WTI traded at $48.86 per barrel while International Benchmark-Brent traded at $52.44.
However, crude prices began soaring, following the easing of Covid-19 restrictions which increased demand for fuel.
In October, WTI jumped to $84.64 per barrel while International Benchmark-Brent leapt to $86.34 per barrel.
The soaring crude oil prices pushed fuel prices up at the pump in most countries, causing more economic hardship and compounding the impact of Covid-19.
For example, in Ghana, West Africa, a litre of petrol and diesel at some point sold at Ghc 6.90 (an equivalent of US$1.09).
This sparked anger among commercial transport operators who lamented over the high cost of fuel and demanded that the government abolish some of the taxes on petroleum products to bring them some relief.
As of the close of Friday, WTI was trading at $76.90 per barrel while International Benchmark-Brent sold at $79.50 per barrel.
Some analysts have predicted that oil prices will hit $100 per barrel in 2022.
Source: https://energynewsafrica.com
The soaring crude oil prices pushed fuel prices up at the pump in most countries, causing more economic hardship and compounding the impact of Covid-19.
For example, in Ghana, West Africa, a litre of petrol and diesel at some point sold at Ghc 6.90 (an equivalent of US$1.09).
This sparked anger among commercial transport operators who lamented over the high cost of fuel and demanded that the government abolish some of the taxes on petroleum products to bring them some relief.
As of the close of Friday, WTI was trading at $76.90 per barrel while International Benchmark-Brent sold at $79.50 per barrel.
Some analysts have predicted that oil prices will hit $100 per barrel in 2022.
Source: https://energynewsafrica.com Ghana: BOST To Build LPG Tanks Across Its Depots-MD
The Managing Director of Bulk Oil Storage and Transportation (BOST) Company Limited, Edwin Nii Obadai Provencal, has disclosed that the company’s aim of building Liquified Petroleum Gas (LPG) storage facilities (tanks) for Ghana was progressing steadily with the Front End Engineering Design (FEED) for the project almost complete.
He said the construction of the LPG tanks at all existing BOST depots, when completed, would enable the company to store LPG as part of national strategic reserve for the Republic of Ghana.
Mr Provencal added that the LPG storage facilities were part of the company’s strategy of aggressively growing its business by developing a network of storage tanks, pipelines and other bulk transportation infrastructure throughout the country.
Mr Provencal was speaking during the end-of-year assessment stakeholder engagement with the media.
The engagement was also used to outline the company’s achievements for 2021 and plans for 2022.
The engagement provided a platform for BOST to share its success stories and challenges with the media as part of efforts to promote probity and accountability in the management of the company.
Mr Provencal said BOST has identified LPG products as one of the opportunities for its growth strategy.
The LPG storage tanks would contribute to meeting the growing demand for LPG products by consumers as it would generate more revenue for the government.
Mr Provencal revealed that BOST would continue to work towards becoming the number one fuel and logistics business operator in the West African sub-region.
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