Oil companies have increased fuel prices marginally at the pumps as at Tuesday, February 1. The price of petrol is currently 7 cedis per liter at GOIL Diesel has also been increased to same amount.
“New fuel prices effective Tuesday 1st February 2022 at 2PM is Super xp – Ghc 7.000Diesel xp – Ghc 7.000,” GOIL said.
This comes after the Institute for Energy Security (IES) had projected that prices of Liquefied Petroleum Gas (LPG), diesel and petrol were likely to go up by 25 pesewas per litre from February 1.
“Over the next two weeks, the Institute for Energy Security (IES) foresees the prices of Liquefied Petroleum Gas (LPG), diesel, and petrol recording yet another jump at the pump, in spite of a suspension of the Price Stabilisation and Recovery Levy (PSRL)”.
“Further depreciation of the Ghana cedi against the US dollar on the foreign exchange (forex) market adds on to the factors that will push up the prices of the commodities on the local market,” the IES statement further explained.
If the IES prediction is true then prices of all the major Oil Marketing Companies will cross the ¢7 per litre mark for gasoil and gasoline.
Meanwhile, the prices of petrol and diesel over the last two weeks rose by roughly 3%, from ¢6.70 a litre on average at most pumps to reach ¢6.94 per litre.
The current national average price for petrol is pegged at ¢6.90 per litre, while that of diesel stands at ¢6.98.
Find details of the IES statement below:
PRICES OF LPG, DIESEL AND PETROL TO EXPERIENCE ANOTHER JUMP AT THE PUMP
REVIEW OF JANUARY 2022 SECOND PRICING-WINDOW
Local Fuel Market Performance
Prices of fuel at local pumps increased within the period under review in response to rising international oil and fuel prices and the depreciation of the Ghana Cedi against the greenback. Over the last two weeks, prices of Gasoline (Petrol) and Gasoil (Diesel) rose by roughly 3% from GH¢6.70 a litre on average terms at most pumps to reach GH¢6.94 per litre. The current national average price for Gasoline is pegged at GH¢6.90 per litre, while that of Gasoil stands at GH¢6.98.
For the Pricing window, the IES Market-scan picked Benab Oil, Dukes Oil, Star Oil, Reliance, Goodness Oil and Westport as the Oil Marketing Companies (OMCs) with the least-priced fuel on the local market.
On the upside, some OMCs including Puma Energy, Ready, Total, EV were spotted selling Gasoil above GH¢7.00 per litre for the first time.
World Oil Market
The price of international benchmark Brent rose within the period, pushing prices to an average of $87.16 per barrel, representing an increment of 8.52% from the previous window’s average price of $80.30 per barrel.
Within the last two weeks, Brent crude price touched $90 a barrel, occasioned by the low Cushing and distillate inventories, combined with the supply jitters in Europe. The stalemate of Russia-Ukraine, and falling Russian seaborne crude imports from the Baltics also affected supply, particularly into Europe. However, prices fell back to $89 before the market closed for that day.
Oil prices on the international market hit the highest level since 2014 as inventories at the Cushing hub in the United States of America sunk by another million barrels on Tuesday, 25 January 2022 as recorded by the American Petroleum Institute (API). The reduced inventories represent the lowest point since 2012 as inventories fell by more than 30% below the five-year average.
On the Russia-Ukraine tensions, fears remain that sanctions on Russia could cause a shortage of crude oil and natural gas, causing some stir among commodity market traders in recent days. Finally, the upward pressure in this oil price scenario is Russia’s exports from its Baltic Sea ports, which are set to drop next month to the lowest level in five months. The concern held by traders is that Russia is unable to ramp up crude oil output as much as its OPEC+ agreement has allowed.
Price of the refined products such as Liquefied Petroleum Gas (LPG), Gasoline and Gasoil monitored on Standard and Poor’s (S&P’s) global Platts platform however experienced significant increments within the period under assessment. The current price increases are extending the gains being recorded on the market over the past six months, with Gasoline, in particular, recording a rise of 13.37% since August 2021.
In the last two weeks, the price of Gasoline increased by $48.31 per metric tonne (6.23%) from its earlier price of $774.94 per metric tonne. The price of Gasoil rose sharply by 9.86%, adding $68.61 per metric tonne, to end the two-week session at $764.61 per metric tonne. Also, the price of LPG on the international fuel market recorded a significant jump of $41.44 to close trading at $792.11 per metric tonne.
The IES Economic Desk’s data captured from the Foreign Exchange (Forex) market shows that the Ghanaian Cedi depreciated marginally against the U.S. dollar by 0.2% on average terms in the first pricing window of January 2022 to trade at GH¢6.285 to the greenback, from the previous window’s rate of GH¢6.262 to the international currency.
IES PROJECTIONS FOR FEBRUARY 2022 FIRST PRICING WINDOW
Over the next two weeks, the Institute for Energy Security (IES) foresees the prices of Liquefied Petroleum Gas (LPG), Diesel, and Petrol recording yet another jump at the pump, in spite of a suspension of the Price Stabilisation and Recovery Levy (PSRL).
The pending increases come on the back of an 8.52% increase in the price of Brent crude, a 5.5% rise in LPG price, a 6.23% increase in the price of Gasoline, and a 9.86% jump in Gasoil price; all on the international oil and fuel markets. Further depreciation of the Ghana Cedi against the US Dollar on the foreign exchange (Forex) market adds to the factors that will push up the prices of the commodities on the local market.
Should there be a reintroduction of the PSRL, the IES can project the prices of Petrol and Diesel sold by the Oil Marketing Companies (OMCs) increasing by at least 25 Pesewas per litre.
The impending price increases could see all the major OMCs crossing the GH¢7 per litre mark for Gasoil and Gasoline, moving the price increases for both products over the past 6 months beyond the 16 percentage mark recorded at the end of January 2022.
Research Analyst, IES