Fuel prices have inched up to GHS6.35 per litre from GH6.23, reflecting a 1.9 per cent increase today, August 21, 2021, and represents a change of GHS0.12 per litre.

This new price development comes in contrast with earlier forecasts that suggest a fall in the price of fuel at the pump in the second half of 2021. This forecast was based on the decline of prevailing international Brent crude price, which at the time sold at US$72.10 per barrel, indicating a 1.49 per cent decrease.

IES forecasts for the second pricing window indicated that “the various change in prices of the commodities on the international market is expected to affect local market prices in Ghana.

“For this window, with the 1.49 percent reduction in the price of the International Benchmark- Brent crude, the 2.17 percent decrease in price of Gasoline, the 1.77 percent decrease in Gasoil price and the marginal depreciation of 0.17 percent of the local currency against the US Dollar.

“The price of fuel on the domestic market at the various pumps are set to dip as we enter the second Pricing-Window of August 2021.”
Institute for Energy Security

However, the price of fuel at GOIL and TOTAL fuel station pumps, for instance, are currently selling at the new price (GHS6.350). Thus, the accelerated rate at which fuel prices have increased since new levies took effect in May 2021, have seen fuel prices skyrocket from GHS5.4 per litre to GHS6.35 per litre. This reflects a 17.6 per cent increase in fuel prices after the levies were imposed.

Global Oil price performance

Despite the decline in global oil prices, this hike in oil price comes as a surprise to consumers who have had to endure increased fares over the last three months. Furthermore, with this new fuel price, consumers’ fear may heighten over a possible rise in transport fares over the near term, which has a ripple effect on food prices and other goods and services.

Against this backdrop, the government introduced levies including an energy sector recovery levy of 20 pesewas per litre of petrol and diesel, a Sanitation and Pollution Levy of 10 pesewas per litre of petrol and diesel.

On the world market, the upsurge of the delta variant continues to pose challenges, as it has slowed down demand for the commodity, accordingly reducing oil prices further. The International Energy Agency last week trimmed its oil demand outlook due to the spread of the Delta variant. OPEC, however, left its demand forecasts unchanged. As at Thursday, August 19, 2021, global oil prices fell to their lowest in about three months.

Brent crude lost US$1.78, or 2.6 per cent, to settle at US$66.45 per barrel, after reaching US$65.57, the lowest level in about three months. U.S. West Texas Intermediate (WTI) fell US$1.71, or 2.6 per cent, to US$63.50 a barrel. It fell earlier to US$62.41 a barrel.

Considering the decline of global oil prices, however, experts are of the view that an oil price collapse would not occur anytime soon, after a huge decline of oil price to US$45 in the early period of 2020.