Bulk Oil Distribution Companies (BDCs) have sounded an alarm of caution to the general public that fuel prices could get to the high levels of last year if the cedi’s depreciation is not checked.

The local currency has depreciated by more than 5% already against the US dollars within the first two weeks of this month, January 2023.

This actually saw some of the BDCs reviewing the payment terms for selling the products to the oil marketing companies and in some cases return to cash and carry.

Some of the oil marketing companies have revealed that they had to pay more in terms of cedis to purchase the same quantity of oil they were buying in December, 2022.This resulted in prices going up by more than GH¢1.00 for a litre.

Two of the major oil marketing companies, that is, TotalEnergies and GOIL have already began adjusting their prices with GOIL taking the lead.

Effective yesterday, January 16, 2023 GOIL prices of petrol and diesel rose to GH¢13.60 and GH¢15.52 respectively.

TotalEnergies at 6:00am today also followed suit in increasing the price of fuel at the pump.

According to the oil marketing companies, the cedi’s current depreciation is a major cause of the surge in the price of oil being sold on the market this week. This is because, the prices of the finished petroleum products have not witnessed any significant increase on the world market.

The BDCs are worried that if the cedi’s situation does not improve within the shortest possible time, the country could be getting back to those high levels at which petroleum products were sold in December, 2022 and that will be burdensome for consumers.

Meanwhile, some of the oil marketing companies said they will be subsidizing the prices on petroleum products after Ghana introduces the Gold-for-oil barter to the market.

The petroleum products, which landed from the United Arab Emirates (UAE) arrived during the weekend and is yet to reach the market, thus, the hope of the oil marketing companies that these oil petroleum products appear to be cheaper than those already being sold on the market.

The price of brent crude will remain in the US$80 bracket in the first quarter of this year, Energy Strategist, Dr. Yussif Sulemana said while he discussing the prevalent issue on the oil market.

The Tumbling of the cedi Is A Cause For Worry

According to the energy strategist, the only cause for concern for the local market is the depreciation of the cedi.

Speaking in effect to this, Dr. Sulemana opined that the dynamics in the first quarter of this year, 2023, will not be too different from what transpired during the latter part of last year, 2022.

“In the first quarter, we are not going to see any erratic jump. We might see it stable like this but the international dynamics is something that is huge, you know, it’s early this year. We just have to wait and see after the first quarter.

“But my prediction is that, I think within the first quarter, we are still going to see oil priced in the 80s or at most below the 80s and that is not good…”
Dr. Sulemana