Dep. Energy Minister dismisses claims crude oil will cost $100 per barrel next month
A Deputy Minister for Energy, Andrew Egyapa Mercer, says he does not think the price of crude oil will cost $100 per barrel beginning next month.
The Minister’s assertion comes on the back of projections by analysts and traders who believe that could further result in the increase in prices of petroleum products and possible hikes in transport fares.
However, Mr. Egyapa Mercer maintains that other analysis do not support such claims, adding that the government would do the needful to cushion consumers locally.
“One will expect that if the price keeps rising, COPEC will react and increase production to ensure that price come down and my expectation from what I gather, is that if we move out of the winter season, that is the demand will drop and that will influence the price.
“Of course that cannot in any circumstances mean that there cannot be any interventions. In the event that we see a situation where in President Kuffour’s era, we saw fuel prices rise as higher as $140, the government will implement some additional interventions just so that we can manage the price, that intervention will come as and when its appropriate,” he said.
Meanwhile, energy experts have highlighted that some major factors contribute to the continuous increase in fuel prices on the international market.
Government has therefore been urged to cushion consumers against any shocks from the rising price of crude oil.
Price of Brent crude hit its highest level in more than seven years on Tuesday, 18th January, 2022, on growing demand optimism, easing concerns about the Omicron Covid variant and geopolitical tensions.
Read: Ghana Card solely to be accepted for transactions effective July 1 – BoG
The commodity hit $86.84 in Asian trade, a level that has not been since late October 2014.
Brent and West Texas Intermediate have climbed more than 10% so far this year as investors become increasingly confident that the demand will increase as the world slowly returns to normal and economies reopen.
Analysts attributed the easing of travel restrictions in several countries which has seen jet fuel costs soar as a major reason.
Also, hopes for more monetary easing measures by key consumer China to support its stuttering economy were also seen as a key support for the oil market.
Another factor in the latest bump was the claim of an attack by Yemen’s Huthi rebels in Abu Dhabi that triggered a fuel tank blast killing three people Monday, with the group warning civilians and foreign firms in the United Arab Emirates.
Reports say the news fuelled concerns about supplies from the crude-rich region.
If the price of crude oil continue to surge then prices of petroleum products will shoot up on the local market in Ghana, consequently leading to increase in transport fares. Some Oil Marketing Companies are already selling petrol and diesel at ¢7 per liter respectively.
Also, inflation and cost of living are expected to go up.
However, government will rake in more revenue from export of crude oil, thus improving revenue.
