IES anticipates another jump in fuel prices in second-pricing window
The Institute for Energy Security (IES) for the second-pricing window of the month of February is anticipating another jump in the prices of Liquefied Petroleum Gas (LPG), diesel and petrol at the various pumps.
The anticipated increment in the price of LPG, diesel and petrol is on the back of price increment in brent crude, gasoline and LPG on the international markets.
This is in addition to the further depreciation of the cedi.
“For the rest of February 2022, the Institute for Energy Security (IES) anticipates another jump in the prices of Liquefied Petroleum Gas (LPG), Diesel, and Petrol at the pump to bite consumers, coming on the back of a 4.47% increase in the price of Brent crude, a 4.63% rise in LPG price, a 7.17% increase in the price of Gasoline, and a 7.43% jump in Gasoil price; all on the international oil and fuel markets.”
“Further depreciation of the Ghana Cedi against the US Dollar adds on to the factors expected to push up the prices of liquid and gaseous fuels in the country,” the IES stated.
In the first pricing window of February 2022, prices of fuel at local pumps increased significantly, rising above GHC7.00 per litre for all major Oil Marketing Companies (OMCs).
With the anticipated increase, prices of fuel at local pumps are steadily inching towards the GHS 8 per litre mark.
Read the full statement below
Local Fuel Market Performance
In the first pricing window of February 2022, prices of fuel at local pumps increased significantly, rising above the Gh¢7.00 per litre mark for all major Oil Marketing Companies (OMCs), as predicted by the Institute for Energy Security (IES). The increment was driven by rising international oil market prices, and the re-introduction of the Price Stabilization and Recovery Levy (PSRL) in the petroleum price build-up (PBU).
Within the period under review, prices of Gasoline (Petrol) and Gasoil (Diesel) rose on average by 5.15 per cent and 6.08 per cent respectively, thus bringing the national average price for Gasoline and Gasoil to Gh¢7.34 per litre and Gh¢7.36 per litre respectively.
Benab Oil, Goodness Oil, Star Oil, Zen Petroleum, and Reliance were picked up by the IES Marketscan as the OMCs with the least-priced fuel on the local market. While Total, Shell (Vivo), Sel and Puma sold the highest-priced fuel.
World Oil Market
The price of international benchmark Brent rose within the period, pushing prices to an average of US$91.06 per barrel, representing an increment of 4.47 per cent from the previous window’s average price
The price of Brent crude experienced the usual volatilities consistent with the market in this window, touching briefly, the US$95 per barrel mark before retreating downwards.
The rallying in prices was occasioned largely by sentiments on traders following heightened tensions in the Russia-Ukraine invasion stalemate and the announcement that the invasion could happen this week. The announcements were followed by a swift response from the US President who promised sanctions on Russia should they invade Ukraine.
The news coming out of Libya of a change in the country’s Prime Minister affected oil prices as the new PM has the potential of engaging in in-country fighting and dampening the prospects of increasing the country’s output.
On outputs, the OPEC alliance failed to reach its targets again, an incident that forced the International Energy Agency (IEA) to add to the calls by India and the USA for the alliance to increase its production and pump more oil. The falling production figures meant a dwindling supply to the increasing demand side.
The global shortage of diesel, as inventories fell in Northwest Europe, the lowest since 2008, also showed signs of a tightening market. The Singaporean stockpile also recorded a drop to as low as 8.2 million barrels.
Price of the refined products, including Liquefied Petroleum Gas (LPG), Gasoline and Gasoil, monitored on Standard and Poor’s (S&P’s) global Platts platform also points to increases in prices within the just ended pricing window. The price of Gasoline increased by 7.17 per cent, representing an addition of US$59.02 to close trading at US$882.27 per metric tonne. Gasoil price also extended its gains by 7.43 per cent, adding US$56.85 to its earlier price of US$764.61 per metric tonne, ending the session at US$821.46 per metric tonne. The price of LPG on the international fuel market followed suit, recording a jump of 4.63 per cent to add US$36.68 to close trading at US$828.79 per metric tonne.
Local Forex
Data captured by the IES Economic Desk from the Foreign Exchange (Forex) market shows that the Ghanaian Cedi depreciated against the U.S. Dollar by 1.74 per cent on average terms in the first pricing-window of February 2022 to trade at Gh¢6.40 from the previous window’s rate of Gh¢6.29 to the international currency.
IES PROJECTIONS FOR FEBRUARY 2022 SECOND PRICING-WINDOW
For the rest of February 2022, the Institute for Energy Security (IES) anticipates another jump in the prices of Liquefied Petroleum Gas (LPG), Diesel, and Petrol at the pump to bite consumers, coming on the back of a 4.47 per cent increase in the price of Brent crude, a 4.63 per cent rise in LPG price, a 7.17 per cent increase in the price of Gasoline, and a 7.43 per cent jump in Gasoil price; all on the international oil and fuel markets. Further depreciation of the Ghana Cedi against the US Dollar adds to the factors expected to push up the prices of liquid and gaseous fuels in the country.
