Fuel price at the pumps could breach the GH¢5-mark next month, after crude oil price on the world market increased by 7.47 percent over the past two weeks – with the local currency seeing a 2.3 percent depreciation this year, the Institute of Energy Security (IES), an energy policy think-tank has said.
This will be the second time in under six months that the price has crossed the GH¢5-mark – the first time being September 17, 2018. Since then, the price has stabilised around the GH¢4.8 to GH¢4.95 mark.
“After more than six pricing-windows of continuous fuel price declines and stability, the Institute for Energy Security (IES) foresees fuel price rising substantially at the pumps. This is explained by the fact that crude and finished product prices have shot up on the international market, with Gasoil seeing a substantial increment of 6.17 percent and average Brent crude price going up by 7.47 percent over the past two weeks.
“The depreciation of the cedi by 2.3 percent remains the single key variable in eroding the price gains on the local fuel market over the past weeks, moving a litre of fuel (especially Gasoil) beyond the GH¢5 per litre threshold once again,” the institution noted in its regular market update.
It however noted that some Oil Marketing Companies (OMCs) are likely to keep their prices stable to attract or maintain market shares in today’s competitive fuel market.
World Oil Market Prices
The window opened with Brent crude trading at US$58.99 per barrel, rising to hit a high of US$62.74 per barrel before declining to US$61.59 per barrel. But on average terms, Brent crude price increased by 7.56 percent to US$61.29 per barrel over the period.
This happened on the back of the crisis in Venezuela, the US-China trade conflict and the International Monetary Fund (IMF) new economic growth forecast which lowered its global growth estimate to 3.5 percent this year, down 0.2 percent from its October 2018 estimate.
While the U.S. considers possible sanctions on Venezuela, the oil-producing country has seen its production continue to decline. At the same time, Russia has signalled its commitment to stick to the OPEC+ production cut.
Estimates from Standard and Poor’s Global Platts benchmark for finished products show that Gasoil prices increased significantly, by 6.17 percent, to close trading at US$566.78 per metric tonne, over a previous price of US$533.85 per metric tonne. However, Gasoline recorded a marginal increment of 0.40 percent to close trading at US$500.28 per metric tonne, from a previous trading figure of US$498.25 per metric tonne.