Rising cost of fuel affecting sales of high engine capacity cars – Automobile Dealers
Automobile Dealers Union Ghana, has disclosed that the rising cost of fuel at the pumps is negatively affecting the sale of high engine capacity cars.
The price of petrol and diesel started the year with GHC 6.65 per litre but is currently selling at GHC 8.29 at some of the major oil marketing companies, representing an increase of about 25 % in the price of fuel at the pumps in the last 9 weeks.
The development has led to agitations from multiple stakeholders as well as a 15% increase in general transport fares.
According to the General Secretary of the Automobile Dealers Union Ghana, Clifford Ansu, used car dealers are also suffering the impact of the hikes.
“Rising fuel prices like we are experiencing affects all businesses. When some people come to our garages to buy cars they look at the engine capacity, when the capacity is high, they get concerned about how to fuel the vehicle. Currently, a gallon of petrol is around GHC 37 and this is of concern to some. This leads to some opting for cars with smaller engine capacities.”
“Most garages have a mix of cars they sell from 0.8 engine capacity cars all the way to 4.7 and 5.7 capacity cars. And the sale of the latter are being affected,” he added.
Meanwhile, oil prices have soared to the highest level since 2008 after the US said it was discussing a potential embargo on Russian supplies with its allies.
Brent crude – the global oil benchmark – spiked to above $139 a barrel, before easing back to below $130.
Energy markets have been rocked in recent days over supply fears triggered by the Russian invasion of Ukraine.
Consumers are already feeling the impact of higher energy costs as fuel prices and household bills jump.
Stock markets in Asia fell on Monday, with Japan’s Nikkei and the Hang Seng in Hong Kong down by more than 3%.
On Sunday, the US Secretary of State Antony Blinken said the Biden administration and its allies are discussing an embargo of Russian oil supplies.
Later, US House of Representatives Speaker Nancy Pelosi said the chamber was “exploring” legislation to ban the import of Russian oil and that Congress this week intended to enact $10bn (£7.6bn) of aid for Ukraine in response to Russia’s military invasion.
“The House is currently exploring strong legislation that will further isolate Russia from the global economy,” Ms Pelosi said in a letter.
The comments came as pressure grows on the White House and other Western nations to take tougher action against Moscow over its invasion of Ukraine.
A Russian oil embargo would be a major escalation in the response to the invasion of Ukraine and would potentially have a major impact on the global economy.
“While the US might just push through a ban on Russian oil imports, Europe can ill-afford to do the same. More worryingly, [Russian leader Vladimir] Putin, with his back to the wall, could turn off gas supplies to Europe, cutting off the continent’s energy lifeline,” Vandana Hari at energy markets consultancy Vanda Insights told the BBC.
The price of Brent crude rose by more than 20% last week as the conflict triggered fears of a shortage of oil on the global markets.
Consumers around the world have seen costs jump in recent days as they feel the impact of rising wholesale energy prices.
On Sunday, the American Automobile Association said that US petrol prices at the pump jumped by 11% over the past week to the highest level since July 2008.
In the UK, the average price of petrol has risen above £1.50 a litre, according to the RAC.
Meanwhile, a jump in the price of gas amid the Ukraine conflict has added to worries that annual UK household energy bills could reach £3,000.
In recent days, the cost of gas in Europe and the UK has hit record levels as fears persist that Russian supplies could be reduced.
