IES predicts minor increase in petroleum prices despite global declines; attributes price hike to cedi depreciation
The Institute for Energy Security (IES) has predicted a marginal increase in the prices of petroleum products in the second half of June 2024.
This forecast is primarily attributed to the deteriorating performance of the Ghanaian cedi against the U.S. dollar, despite global prices for finished petroleum products such as petrol, diesel, and Liquefied Petroleum Gas (LPG) having fallen for the second consecutive time.
Over the past two weeks, the prices of these petroleum products have declined: gasoline by 5.49%, diesel by 2.82%, and LPG by 1.48%. Ideally, these reductions in international prices would lead to lower prices at local fuel pumps, providing relief to consumers.
However, the Ghanaian cedi’s consistent poor performance, with a depreciation of 3.44% against the U.S. dollar, is likely to negate these potential benefits.
Given the current dynamics of both the international petroleum market and the domestic foreign exchange market, the IES anticipates that the worsening exchange rate will offset the lower global prices, resulting in a slight increase in fuel prices locally.
“Gasoline [petrol], Gasoil [diesel], and Liquefied Petroleum Gas (LPG) have recorded falling prices for second time in a row. Specifically, price of Gasoline has fallen by 5.49%, Gasoil by 2.82%, and LPG by 1.48% over the last two weeks. Following the positive price changes recorded on the international market for petroleum products, prices at the local pumps should reflect a reduction to bring some comfort to consumers. However, the consistent poor performance (3.44%) of the Ghana Cedi against the U.S. Dollar is likely to prevent any expected drop in fuel price to reflect world fuel market dynamics on the local fuel market,” noted the IES.
“On the back of above developments in the foreign fuel market and the domestic forex market, the Institute for Energy Security (IES) foresees a marginal increase in fuel prices in the Second half of June 2024, on account of the worsening performance of the Ghana Cedi”, added the IES.
Local Fuel Market Performance
The Institute for Energy Security (IES) daily monitoring of the domestic fuel market for first pricing-window for June observed mixed reactions from Oil Marketing Companies (OMCs).
Goil, Shell (Vivo), and Puma raised per litre price for liquid fuels marginally by about GH₡0.30 averagely. The remaining Oil Marketing Companies (OMCs) maintained price for liquid fuels for the period under review.
Liquefied Petroleum Gas (LPG) sold at GH₡15.96 reflecting a marginal increase of about GH₡0.30 per kilogram (kg) in the closed window.
The Institute for Energy Security’s (IES’) computation of national average price for the three (3) refined petroleum products for the first pricing-window for June 2024 show Gasoline and Gasoil selling at GH₡14.26 and GH₡14.08 per litre respectively, whereas (LPG) went for GH₡15.96 per kilogram (kg).
The IES Marketscan finds Zen Petroleum, Star Oil, and Benab Oil as OMCs selling at least priced over the last two weeks.
World Fuel Market
The monitoring of the global Standard & Poor’s (S&P’s) Platts on petroleum products performance in the world fuel market shows that the price of Gasoline, Gasoil, and LPG continue to all decline in the first pricing-window for June 2024.
Published data for the first pricing-window of June 2024 show Gasoline closed at $804.93 per metric tonne, Gasoil closed at $728.52 per metric tonne, and LPG closed at $438.20 per metric tonne. The net changes indicate that the price of Gasoline has fallen by 5.49%, Gasoil by 2.82%, and LPG by 1.48%
