The Institute of Energy Security (IES) has predicted that despite the 8.48% fall in the price of Gasoline, 5.86% fall in the price of LPG, and the 7.26% fall in Gasoil price in the international market, the prices of fuel in the local market may see marginally price increase at the pumps.
The IES in a statement explained that the steep depreciation of the Ghana Cedi against the US Dollar may wipe away the gains from the international fuel market.
On the back of the fall in the value of the Cedi, the IES noted that Ghanaians may either have to buy fuel at a much higher price or contend with the current pump prices in the coming days.
Below are details of the IES statement:
FUEL PRICE INCREASES IN THE OFFING, IN SPITE OF FALL IN INTERNATIONAL PRICES”
REVIEW OF AUGUST 2022 FIRST PRICING-WINDOW
Local Fuel Market Performance
The local market saw prices marginally reduce in response to price changes in the international market. Oil Marketing Companies (OMCs) monitored within the pricing window shed off GH40p on their prices at their pumps. The national average price per litre of Gasoline stands at Gh¢10.58 down from Gh¢11.30 in the last window, representing a 6.37% reduction. Gasoil’s national average price per litre stands at Gh¢13.28 from a previous average of Gh¢13.65, representing a 2.71% reduction.
Within the window, the IES Marketscan picked Total, Goil, Puma, Shell, and Sel: as OMCs with the highest-priced fuel on the downstream petroleum market. Meanwhile, Petrosol, Benab, Goodness Oil and Zen Petroleum, and Benab Oil were spotted as the OMCs with the least-priced fuel on the local fuel market.
World Oil Market
Brent’s price continues to fall on the international market. The International Benchmark saw a price reduction of 2.80% over the previous pricing window’s average price to a current average price of $98.38 per barrel from $101.21 per barrel.
IES Construct, with data from Oilprice.com
Since Russia’s invasion of Ukraine, oil prices have erased all of their gains as recession fears mount.
Bearish sentiment now dominates the oil market due to fears of a recession, steady Russian oil exports contrary to early projections of huge losses in the vicinity of 3 million bpd, and decreased Chinese manufacturing activity and COVID-related lockdowns affecting fuel use.
This month and next, the hurricane season in the United States may shut down Gulf of Mexico production platforms and Gulf Coast refineries. The end of U.S. Special Petroleum Reserve releases in October might be an additional good cause before the end of the year.
While some analysts believe that oil prices will continue to fall as recessions approach, others believe that the current recession may not result in a year-over-year decline in oil consumption.
World Fuel Market
Fuel prices monitored on Standard & Poor’s (S&P’s) Platts platform within the just-ended pricing window experienced losses. Gasoline price fell by 8.48%, from its initial price of $1103.75 per metric tonne to the end date price of $1010.75 per metric tonne.
Gasoil price also saw a fall of 7.26% in its price from its earlier price of $1112.75 per metric tonne to a present price of $1032.00 per metric tonne.
LPG’s price on the international market also continues to drop. In the just-ended window, prices came to 5.86% lower than its earlier window price of $659.00 per metric tonne to an end date price of $620.38 per metric tonne.
Data monitored by the IES Economic Desk from the foreign exchange (Forex) market over the last two weeks depicts a further steep depreciation of the Cedi against the US Dollar. The Ghana Cedi depreciated by 5.40% from the previous rate of Gh¢8.35 to the current rate of Gh¢8.83 to the US Dollar.
IES PROJECTIONS FOR AUGUST 2022 SECOND PRICING-WINDOW
Despite the 8.48% fall in the price of Gasoline, 5.86% fall in the price of LPG, and the 7.26% fall in Gasoil price, the Institute for Energy Security (IES) projects that prices of fuel on the local market may see marginally price increase at the pumps.
The steep depreciation of the Ghana Cedi against the US Dollar may wipe away the gains from the international fuel market. On the back of the fall in the value of the Cedi, Ghanaians may either have to buy fuel at a much higher price or contend with the current pump prices, in the coming days.
Research Analyst, IES
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