TOR and BOST must absolve Ghanaians from increase in fuel prices – COPEC
The Chamber of Petroleum Consumers Ghana (COPEC) says the Tema Oil Refinery [TOR] and the Bulk Oil Storage and Transportation Company [BOST] Limited must absolve the public from fuel price increases.
This follows concerns that global oil prices will hit record levels this year.
Executive Secretary of COPEC, Duncan Amoah, stated that these state institutions must mitigate the impact of the expected hike in fuel prices at the pumps.
“The strategy for Ghana as a country will be to ensure BOST is very active and ensure again that the refinery is also active. Once you put these two together, you are in a very good space to get certain things running for Ghanaians. BOST has also brought down pipelines that should aid in the transportation of oil from one point to the other and reduce the pressure on our roads. We are encouraging, BOST to ensure that these pipelines are as soon as possible, fixed and made to work,” he stated.
“Once that works, the cost of fuel transportation, which we pay for in the price build-up, the taxes would at least go down and fuel prices can come down a bit. This should be our key strategy, at least for 2022 bearing in mind that international market prices are set to simply go up and, so BOST again would also have to take advantage of their large capacity to hold fuel reserve.” He added.
Tema Oil Refinery for a while now, has not been operational following some challenges its currently facing, BOST on the other hand, has also not been able to live up to its mandate to keep Strategic Reserve Stocks for Ghana.
Read: ACEP accuses GNPC of seeking to assign oil interest to tax haven registered company
The Energy Minister, Dr Matthew Opoku Prempeh, upon assuming office had assured that the Tema Oil Refinery will be brought back and made fully functional.
BOST MD, Edwin Provencal, had also stated that, “we have about two weeks [of reserve], but there is a key point here, even though we have two weeks I will not even term them as strategic reserves.”
He then called for a new levy to be introduced to help BOST improve upon the country’s current oil reserves.
Fuel Price Increase: OMCs to sell petrol and diesel at GHS 7
Energy think tank, Institute for Energy Security (IES), has said fuel price increment in the coming days is imminent given the increase in crude price on the international market and depreciation of the cedi.
According to the IES, consumers should remain expectant of a further increase in fuel prices at the pumps – between GHS 0.30 to GHS 0.40 per litre.
The projected increment in fuel price the think tank notes, is to be driven by the 7.42% increase in the price of Brent crude, the 9.46% increase in price of Gasoline, the 8.52% increase in Gasoil price and the 0.3% depreciation of the local currency against the US Dollar.
“The imminent price increases may force some OMCs to sell Gasoline and Gasoil at Gh¢7.00 per litre at the pumps for the first time,” remarked the IES in its assessment of the first pricing-window for January 2022.
Global oil price
Global oil prices after dipping to about 68 dollars per barrel is currently inching towards 85 dollars a barrel, yet analysts are tipping the price to shoot up even further.
Oil prices hit two-months high on Wednesday on tight supply, and there are concerns about a potential hit to demand from the Omicron coronavirus variant.
Federal Reserve Chairman Jerome Powell said on Tuesday, January 12, that the economy of the United States, the world’s biggest oil consumer, should weather the current COVID-19 surge with only “short-lived” impacts and was ready for the start of tighter monetary policy.
Brent crude futures were up 34 cents, or 0.4%, at $84.06 a barrel at 0918 GMT on Wednesday (12 January 2022).
U.S. West Texas Intermediate (WTI) crude futures were up 49 cents, or 0.6%, to US$81.71 a barrel. Both contracts are set for their sixth session of gains out of eight.
The Brent contract is showing growing backwardation with front-month delivery around US$4.20 more expensive than delivery in six months’ time, indicating tight supply currently.
OPEC+ producers continue to hold back more than three million barrels per day in output, while sanctions on Iran pin back its exports.
And though OPEC+ producers are raising their output targets each month, technical difficulties have prevented several countries from hitting their quotas.
“Assuming China doesn’t suffer a sharp slowdown, that Omicron actually becomes omi-gone, and with OPEC+’s ability to raise production clearly limited, I see no reason why Brent crude cannot move towards US$100.00 in Q1, possibly sooner,” said Oanda analyst Jeffrey Halley.
“There are plenty of variable outcomes in the previous sentence, the biggest threat being Omicron in China, India, and Indonesia.”
Meanwhile, European jet fuel refining margins are back to pre-pandemic levels as supplies in the region tighten and global aviation activity recovers.
U.S. crude stocks fell by 1.1 million barrels for the week ended 7 January, according to market sources citing figures from the American Petroleum Institute (API) industry group.
On Tuesday, the U.S. Energy Information Administration upgraded its oil demand outlook, seeing U.S. demand rising by 840,000 bpd in 2022, up from a previous forecast for an increase of 700,000 bpd.
