Gov’t reduces fuel prices by 15p per litre effective 1st April

The oil price spike

Finance Minister Ken Ofori-Atta has announced a reduction to margins in the petroleum price build-up by a total of 15 pesewas per litre with effect from 1st April.

This is intended to mitigate the impact of rising prices for petroleum products at the pump over the next three months.

“These reductions in margins are expected to reduce prices of petrol by 1.6 percent and diesel by 1.4 percent,” the minister said in an announcement at a press briefing on Thursday.

Unlike in other countries where the hike in crude oil prices and exchange rate volatility are leading to shortages in the supply of petroleum products, the finance minister assured that government is implementing measures to guarantee a constant supply of petroleum products.

Mr. Ofori-Atta mentioned that this measure is anticipated to strengthen the local currency, which should further help stabilise prices at the pumps.

Detailing reductions in margins, the minister stated that the BOST margin is being reduced by 2 pesewas per litre while the unified petroleum pricing fund (UPPF) margin is reduced by 9 pesewas per litre. The Fuel Marking Margin (FMM) is being reduced by 1 pesewa per litre, and the Primary Distribution Margin (PDM) is reduced by 3 pesewas per litre.

The rising prices of fuel at the pumps has largely been influenced by rising crude oil prices on the international market and cedi exchange rate depreciation.

Though the rise in crude oil prices should have been to the country’s benefit on a net basis, Ghana’s import of petroleum products amounts to 5.2 times the value of proceeds from its crude oil exports, the minister noted.

In 2021, the country exported US$3.97billion of which Ghana’s portion was US$513million. However, it imported US$2.7billion of crude oil and finished products. From January to date, the average ex-pump price of diesel and petrol has increased by 57 percent and 45 respectively.

“The NPA is in discussion with the oil marketing companies (OMCs) to reduce their margins within the spirit of burden-sharing. Government will do all it can to ensure a consistent supply of fuel and manage the rate of ex-pump price increase by ensuring the BoG has access to adequate foreign exchange,” Mr. Ofori-Atta said.

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