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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
GH¢36m saved due to prudent management of pre-mix fuel-Afoley
Additionally, the 286 Landing Beach Committees had accumulated over seven million Ghana cedis in their Community Development Fund accounts from the sale of pre-mix fuel allocated to the community.
Consequently, the National Pre-mix Fuel Secretariat had installed tracking devices at the Secretariat to monitor the movement of the trucks that cart the commodity from the Tema Oil Refinery (TOR) to the intended destination to check diversion and other corrupt practices.
Madam Elizabeth Afoley Quaye, the Minister of Fisheries and Aquaculture Development, announced this at the Meet-the-Press Series in Accra on Tuesday, to update the public on the Ministry’s activities and achievements and solicit ideas to enhance its policies.
She said the accumulated amount in the Community Development Fund of the LBCs were being used to fund various developmental projects including market centres, drainage systems, toilet facilities, community-based health planning systems (CHIPS) compounds and hostels, which were at the various stages of completion.
Madam Afoley Quaye said hitherto, the 53 percent of the proceeds from the sale of pre-mix fuel meant for community development ended up in individual pockets, for funding the construction of political party offices and party activities at the expense of the people.
Explaining how those successes were chalked, the Minister said upon assumption of office by the ruling NPP Government, it constituted an Inter-Ministerial Committee comprising the Energy, the Finance, Fisheries and Aquaculture Development, National Petroleum Authority and the National Premix Fuel Secretariat and outlined strategic measures to halt the corruption in the pre-mix fuel sale and management.
The measures implemented by the Inter-Ministerial Committee resulted in the reduction of the number of Landing Beach Committees from 475 to 286, while daily and monthly returns book were introduced for proper record keeping and accountability of the sale of the commodity.
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No fatality at Ghana Gas since 2011
The General Manager in-charge of Operations at Ghana Gas, Mr Robert Kofi Lartey revealed this when the Parliamentary Select Committee on Mines and Energy visited the gas processing plant at Atuabo on Monday. The visit was to help members of the committee get abreast with the operations of the gas processing plant. He indicated that the company takes safety issues seriously and so had set up community liaison officers who were trained periodically on safety related matters as far as the operations of the company were concerned. “This is part of the requirements of the Environmental Protection Agency (EPA) so that the officers would educate the residents in the communities in which the company operate on our safety issues”, he told the members of the select committee,” he said. He indicated that since the company’s pipelines were located offshore, Ghana Gas was collaborating with the Marine Police to educate fishermen on the need to stay away from the installation of the gas processing in the sea. He told the members that Ghana Gas Company was undertaking an expansion exercise to enable it process more gas by 2024 for both power generation plants and private businesses. “We have laid a very good foundation for any industry that is interested in doing business with Ghana Gas to easily off-take reliable supply of Gas at any time. “Currently, we have a gas pipeline from Aboadze to a free-zone enclave at Ashiem in the Shama District called Wanka Ceramics which is taking lean gas from us. We also have Twyford ceremanics that is also taking gas. “At the Prestea corridor, we are undertaking a massive infrastructural expansion activity over there and hopefully by June this year we should have another private company that will be ready take gas for power generation”, he revealed. Vice Chairman of the Select Committee, George Mireku Duker, commended Ghana Gas Company for undertaking an expansion exercise to enable it process more gas by 2024 for both power generation plants and private businesses. A Ranking Member of the Committee, Adams Mutawakilu said he was impressed with the manner in which Ghanaians were able to manage the infrastructure. “This is a clear manifestation that when we are given our own assets, we can manage them. Now Ghanaians are managing Ghana Gas with world class safety records and environment”, he indicated.
Seplat and Nigerian Gas Prepare to Boost Output
ANOH Gas Processing Co., which is owned by Seplat and Nigerian Gas Co., will develop, build and operate the plant located in Imo state.
Seplat and Nigerian Gas will provide 60% of the funds as equity, while ANOH will source the balance as debt, Seplat CEO Austin Avuru said in a Bloomberg interview. “Both parties already have each contributed $100 million in equity,” Avuru said. “There will be another equity injection and at the back end of it will be debt.’’
The plant, which will process wet gas from the unitized upstream fields at OML 53 and OML 21, has an initial capacity of 300 Mmcf/d. It’s scheduled to begin production by the last quarter of 2020 and the first supply is targeted in 2021, Avuru said.
ANOH will target local customers and has the capacity to double production “depending on domestic demand and the availability of feeds including third-party gas,” Avuru said. Source: petroleumafrica.com
GNPC to pay US$250m for unused gas
Under the agreement, the government is under an obligation to off-take the gas from the various oil producing fields in the country and failure to do so attracts a penalty. As a result of the country’s failure to put in place the appropriate infrastructure to off-take the gas from these fields, the GNPC has been left with no choice than to cough up US$250 million to settle the country’s obligations in 2019. This was contained in the committee’s report on the 2019 programmes and activities which was presented to the house on April 10. The committee noted that the monthly commitment from the Sankofa-Gye-Nyame field alone was about US$42 million per month. Relocation of Karpowership In a bid to fully utilise the gas from these fields, the GNPC has budgeted an amount of US$31.5 million to relocate the Karpowership power barge from Tema to Aboadze in the Western Region to enable it to make use of about 60 MMScf/d of gas from the Sankofa-Gye-Nyame field. This is also expected to help ensure the full utilisation of indigenous gas resources, while ensuring the barge reaches its capacity. GNPC’s commitment under escrow account The committee was also informed that the GNPC’s commitment to maintaining a minimum amount of US$205 million in a reserve escrow account to cover four and half months of gas payment under the Offshore Cape Three Points (OCTP) gas supply agreement had been reviewed downwards to US$157 million following the recent adjustment in gas prices. While the corporation had made efforts to meet the minimum amount required under the agreement, the committee noted that the off-takers of gas in the downstream had not been able to pay the gas delivered to them, resulting the GNPC having to continuously make annual budgetary allocations to replenish the drawdowns. The committee, therefore, urged the government to step up its efforts in finding lasting solutions to the financing challenges of the energy sector institutions. Financial requirements It was also observed that total revenue of US$1.3 billion was originally expected to be accrued to the GNPC in 2019, while expenditure was projected at US$1.6 billion. The expected revenue included the corporation’s share of crude oil sales and internally generated funds totaling US$609.2 million and gas business of US$748 million, resulting in a gap of US$250.76 million. The committee, however, noted that contrary to the Petroleum Revenue Management Act, 2011 (Act 815), the corporation had stated as part of its incomes, receivables in the amount of US$232.82 million as coming from portions of the petroleum royalties due the state. Though the corporation indicated the consent of the Ministry of Finance in such financing arrangement, the committee found it to be in contravention of the Act and accordingly recommended for its removal. The Minister of Energy in consultation with the corporation accepted the committee’s recommendation and reprioritised the expenditure items, resulting in a new funding gap of US$493.58 million to be financed through borrowing. Corporate Social Responsibility In justifying an allocation of an amount of US$43.05 million for Corporate Social Responsibility (CSR), the corporation explained that Ghana had adopted petroleum local content and local participation policy with an objective of maximising the benefits of oil and gas endowments. The sector is, however, currently dominated by foreign participation in terms of key positions and major contracts, making the realisation of such policy objective impossible. Officials of the GNPC, therefore, explained to the committee that its three-prong concept on CSR was, therefore, geared towards creating a harmonious condition for the development of requisite local human resources for Ghana’s petroleum industry Source: Graphic. com.gh
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Head of Delivery Unit at the Office of the Vice President and a member of the Energy Sector Reform Committee Prof Kwaku Appiah-Adu, said the reform will among other things punish officials whose actions will lead to contracts in the sector that affects the country. The reform committee believes the move will help reduce debts in the sector. The energy sector debts which hit about 2.4 billion dollars is one of government’s major challenges as it affects most part of the economy. Although successive governments have defrayed some of the debts, Prof Kwaku Appiah-Adu said: “It’s the rules and regulations that need to be followed and a technocrat or somebody has signed an agreement which really shouldn’t have been signed, because you if look at what we have in place, already we have excess capacity there is no need for us to sign any new agreement, who advised what, were the figures at the time they signed, so all we are saying is that the rules and regulations that guide the signing of such agreements should be looked at vis-à-vis the agreement that has been signed and if anyone has flouted a rule then the laws of the nation have to apply that’s all we are saying we keep it nice and simple then the details will be implemented of course by the law court and any other committees that are put is together to come up with specific recommendations as to what penalties that will be meted out.”
Arker Energy sensitises oil and gas suppliers on procurement processes
Other topics treated were Local Content in Procurement, Compliance in the Arker Energy Procurement Process, Tax, Reimbursement, Cash Refund and Withholding Taxes. Mr Bernard Owusu-Ansah, the Contract Advisor of Arker Energy, entreated the participants, who intend to do business with the company, to abide by all the rules and regulations pertaining to procurement and supplies. He said Arker Energy had transparent and fair procurement processes, which were done electronically to avoid manipulation. Mr Owusu-Ansah said issues such as pricing, local content technology, health and environmental safety were paramount when it came to awarding contracts in Arker Energy. “Once you submit a solid tender you don’t need to know someone in Arker Energy before your contract is approved,” he said. Mr Owusu-Ansah said performance reviews were regularly conducted to ensure the effective execution of contracts. Mr Francis Wajah, an official of the company, who took the participants through Health Safety and Environment in Procurement, said Arker Energy dealt with competent and reliable suppliers as offshore operation was a high-risk project. He said all products and services delivered must meet standards with a good and robust Health Safety and Environment Policy. Mr Edward Owusu-Manu, the Supply Chain Manager, who made a presentation on the history of the company, said established in 2018, Arker Energy was rapidly growing its capabilities and would hire competent people to manage its varied components. He said it conducted business with integrity, respect to culture, dignity and right of individuals everywhere it operated and would comply with all applicable laws and regulations in the country. It has a workforce of 250 out of which 205 are Ghanaians, he said, and hinted that more supplies were needed in Information and Communication Technology, catering and marine logistics. Mr Owusu-Manu said the company was committed to contributing to the enhancement of local industries in Ghana through its supply chain activities. Source:GNA