Fuel, Fertiliser Price Surges Signal Imminent Food Inflation – Nicholas Gbana
Rising global energy and input costs triggered by tensions around the Strait of Hormuz are already transmitting into Ghana’s domestic economy, with significant implications for transport, food prices and overall cost of living, Development Economist and Chartered Accountant Nicholas Gbana has warned.
Speaking during the NorvanReports and Economic Governance Platform (EGP) X Space discussion on Sunday, March 15, 2026, on the theme “State of Ghana’s Food: The Impact of a Strait of Hormuz Closure”, Mr Gbana pointed to sharp increases in petroleum product prices as an early signal of the looming impact.
“The floor price, petrol is moving from GH¢10.46 to GH¢11.57 per litre… that’s an 11% jump. Diesel is moving from GH¢11.40 to GH¢14.35, that is a 26% jump… it takes effect tomorrow,” he stated, adding that the increases will inevitably cascade through the economy.
According to him, higher fuel prices will directly translate into increased transport costs, with consequential effects on food prices given Ghana’s heavy reliance on road transport for the movement of goods.
“So naturally, it’s going to hit us… when floor price goes up, transport price goes up, food is moved with vehicles,” he explained.
Beyond domestic fuel price adjustments, Mr Gbana highlighted emerging pressures within the global shipping industry, referencing recent developments communicated by the Ghana Shippers’ Authority.
He noted that additional shipping-related charges, including risk premiums, have surged to between $1,500 and $2,000 per 20-foot container, a development expected to drive up haulage costs and, ultimately, import prices.
“What it means is that potentially even imports that probably have been ordered… hauling rates would likely go up if this crisis doesn’t end soon,” he cautioned.
On the agricultural front, Mr Gbana revealed that global fertilizer prices have risen by nearly 40% within the past two weeks, largely due to production disruptions in the Gulf region—home to some of the world’s largest urea producers.
“One of the single largest producers of urea is based in the Gulf region and they’ve had to stop production, and that already has triggered an increase in global fertilizer prices,” he said.
The situation, he warned, could further exacerbate food insecurity in Ghana, where an estimated 12.5 million people—about 35% of the population—were already classified as food insecure as of September 2025.
He emphasised that the impact of rising food prices will be uneven, with low-income urban populations expected to bear the brunt.
“Mostly going to be the low-income urban poor… in Accra, Kumasi, Takoradi, where people don’t have farms… they’ll be hardest hit,” he explained, contrasting this with rural households that may have some level of food self-sufficiency.
On policy response, Mr Gbana noted that Ghana’s capacity to stabilise food prices through strategic reserves remains limited, citing the absence of fertilizer reserves and constrained buffer stock levels.
“Our options for stabilization… by releasing reserves of inputs like fertilizer or food stock—it’s limited,” he observed.
He, however, proposed targeted social interventions as a more immediate mitigation strategy, including expanding beneficiary coverage under the Livelihood Empowerment Against Poverty (LEAP) programme beyond the currently budgeted 400,000 households.
“If more people are going to fall into that LEAP threshold, they may have to increase that… to maybe 500,000,” he suggested.
Mr Gbana also stressed the need for prioritised funding for food-related programmes such as the school feeding initiative, noting persistent challenges with budgetary disbursements.
“It’s quite critical that the Ministry of Finance prioritise the release of money to anything that is food-related,” he said.
At the household level, he encouraged dietary adjustments as a coping mechanism, urging families to diversify food consumption in response to rising prices of staples.
In the medium term, he advocated increased promotion of compost fertilizer as a partial substitute for imported inputs, alongside renewed efforts to develop a domestic fertilizer industry leveraging Ghana’s natural gas resources.
Referencing a previously announced but stalled fertilizer plant initiative involving Ghana Gas and a Moroccan partner, Mr Gbana underscored the need for policy continuity and execution.
“These are medium-term issues that we need to tackle so that when things like this happen that we don’t control, the effects are reduced,” he concluded.
