IES says ex-pump prices may remain stagnant within second-pricing window of November
The price of fuel on the local Ghanaian market experienced an increment within the first pricing-window of the month of November 2021.
Right from the beginning of the window, prices of petroleum products recorded significant upward reviews, from the major Oil Marketing Companies (OMCs), with Total Petroleum Ghana leading the charge. Prices of Gasoline and Gasoil at the pump increased by roughly GHp10 per liter, in spite of the suspension of the Price Stabilization and Recovery Levy (PSRL) by the National Petroleum Authority (NPA).
The price increases recorded brings the national average price of fuel per litre in Ghana to Gh¢6.81 per litre for Gasoline (Petrol) and Gh¢6.79 for Gasoil (Diesel), from Gh¢6.64 for both Gasoline and Gasoil.
As per the IES Marekt-Scan, Benab Oil, Zen Petroleum, Cash Oil, Goodness Oil and Top Oil stands as the OMCs that sold the least-priced fuel on the local market, for the pricing-window under review.
World Oil Market
The International Benchmark Brent Crude saw its price tumble within the period under assessment with price selling on average at about US$83.25 per barrel mark, a 1.54 percent decrease from the previous window’s average price of US$84.55 per barrel mark.
The price of the Brent Crude suffered the usual volatilities on the back of the constant geopolitical issues with OPEC+, the United States of America, and the return of global economies from the impact of the pandemic.
Source: IES Construct 2021, with data from oilprice.com, Reuters & Economic Times
Brent has fallen for a third week in a row, underpinned by a strengthening US Dollar resulting from US inflation rate surge fueling rate hike speculation; dampening foreign demand for Crude. Contributing to the price fall is the speculations that President Joe Biden’s administration might draw down U.S. Strategic Petroleum Reserve (SPR) to take some of the heat off prices. In addition, demand prospects have soured a bit lately as OPEC cut its Q4 2021 oil demand forecast by 330,000 barrels per day as high energy prices and inflation hamper economic recovery.
take some of the heat off prices. In addition, demand prospects have soured a bit lately as OPEC cut its Q4 2021 oil demand forecast by 330,000 barrels per day as high energy prices and inflation hamper economic recovery.
Read: GSE maintains upward rally; returns 55.07% YTD
The current happening on the global oil market goes to show the role played by policy-makers, and prompting the market that prices are not only influenced by the supply-demand orientation, but also from monetary policy forecasts coupled with diverse government interventions.
The price of the refined products such as Gasoline and Gasoil as monitored on Standard and Poor’s global Platt’s platform also shows some changes within the period under review. The price of Gasoline increased by about 2.40 percent to close the window at US$837.21 per metric tonne from its earlier price of US$818.21 per metric tonne. Price of Gasoil also increased within the period by 0.74 percent to close trading at US$720.50 per metric tonne from its earlier price of US$715.23 per metric tonne in the second window of October 2021.
Local Forex
Data monitored by the IES Economic Desk from the Foreign Exchange (Forex) market shows that the Cedi further depreciated against the U.S. Dollar by 0.66 per cent to close trading in the last window at Gh¢6.13 to the US Dollar from the previous window’s Gh¢6.09 to the greenback.
PROJECTIONS FOR NOVEMBER 2021 SECOND PRICING-WINDOW
For the November second Pricing-window, and based on the 1.54 percent decrease in the price of international benchmark Brent crude, the 2.40 percent increase in price of Gasoline, the 0.74 per cent increase in Gasoil price and the 0.16 per cent depreciation of the local currency against the US Dollar; the Institute for Energy Security (IES) foresee prices of fuel remaining stagnant for the window, despite the increase in price of finished products. This is in due to the recent increases in prices at the pumps which has generated a lot of public concern.
