Increase in petroleum prices, freight cost to result in hike in prices of goods – Analyst
Chief Finance Officer at the Valley View University, Dr Williams Peprah, has indicated that prices of some goods are expected to up on the market as a result of increases in petroleum prices and freight cost.
His assertion comes on the back of the conflict between Russia and Ukraine, two biggest producers of oil in the world.
Already, there is an anticipation of further increase in prices of petroleum products from Tuesday, March 1, 2022 as a result of the deregulation policy by government.
Dr. Peprah noted that if the war persists, global trade will be affected and Ghana will not be left out.
‘’Russia is known for oil production and so if they decide to slow down in terms of energy production, let me put it in a bigger perspective, we are going to see a high rocket pricing in our energy sector which will trickle down to us in Ghana to increase our fuel prices.
“You know we are doing the deregulation, so government will not have the right to intervene unless government decides to remove the taxes so this is going to affect us.
Read: Russia-Ukraine Feud: Ghana’s economy to be negatively impacted – Yofi Grant
“Also, in terms of commerce and movement, you know where Russia is pushing to, sometimes our vessels pass through their water bodies and if they are disturbed its going to affect us getting some goods to come in as a country. We may also see freight prices going up because vessels will have to divert their goods to come in’’, he said.
Meanwhile, the Chief Executive Officer of the Ghana Investment Promotion Center, Yofi Grant has expressed worry over the negative impact the Russia-Ukraine feud will have on the Ghanaian economy.
He noted that, even though Russia and Ukraine are not major players in the country’s investment space, the ripple effect of the crisis could adversely affect not only the global economy but Ghana’s as well.
Mr. Grant also indicated that with Russia and Ukraine being significant players in the global oil market, a full-blown war could be disastrous for the economy as the price of oil on the international market will see a huge hike.
Oil prices jumped on Thursday, with Brent rising above $100 a barrel for the first time since 2014, after Russia attacked Ukraine exacerbating concerns about disruptions to global energy supply.
Brent crude rose $7.07, or 7.3%, to $103.91 a barrel at 0944 GMT, and U.S. West Texas Intermediate (WTI) crude jumped $6.43, or 7%, to $98.53 a barrel.
Brent and WTI hit their highest levels since August and July 2014, respectively.
According to him the hike in the price of oil could have devastating effects on the Ghanaian economy as the government will not be able to absorb the margins that will result from such a hike, which could directly translate to the rise in prices of goods and services in the country.
