The Institute for Energy Security (IES) has predicted between 7% and 13% jump in the prices of petrol, diesel and Liquefied Petroleum Gas (LPG), from February 1, 2023, for the next two weeks.
According to the IES, the rise in domestic fuel prices is due to the sharp depreciation of the cedi during the last two weeks and the rising international fuel prices as observed on the global S&P Platts platform.
By this, IES revealed that petrol and diesel will see significant hikes.
“On the basis of the rising international fuel prices as observed on the global S&P Platts platform, linked with the local currency’s value decline against the greenback, the Institute for Energy Security (IES) estimates a 7% to 13% jump in the prices of Gasoline [petrol], Gasoil [diesel], and LPG over the next two weeks ending February 14, 2023”.
Institute for Energy Security
Gold for Oil policy impact in fuel prices
The IES indicated that the rise in domestic fuel prices would be occasioned in spite of government’s receipt of approximately 41,000 metric tonne of Gasoil under its “Gold for Oil” programme. It explained that consumers must be prepared to buy for instance, a litre of Gasoline [petrol] for roughly ¢15 in the coming days.
Prior to this, Executive Secretary of the Chamber of Petroleum Consumer (COPEC), Duncan Amoah, revealed that the first consignment for the gold for oil policy will have marginal impact on the market if it’s not increased.
According to him, the government must scale up and import more of the petroleum product otherwise the paltry 41,000 metric tonnes imported into the country will not have the desired reflection at the pumps. He indicated that initial checks with the Bulk Oil Storage and Transportation Company Limited (BOST) indicates that the 41, 000 metric tonnes that was brought in has probably been sold off already.
Mr Amoah highlighted that the first consignment of petroleum product under the policy could do just about 20% of market demand. By this, he explained that there’s an overwhelming backlog of 80% of market demand still controlled and probably imported for by the private Bulk Distributing Companies.
Commenting on whether the consignments may likely get to 80%, Mr Amoah noted that it will depend on the arrangement between government and the intermediary for the deal. He underscored that the petroleum product from the deal must dominate the market demand against the ones imported by BDCs.
It will be recalled that a similar prediction in fuel prices was given by the Institute as it revealed last year October that there will be a surge in prices at the pumps.
This, it explained, was due to the increases in price of the products on the international market, and the significant decline in the value of the local currency against the American greenback or US dollar.
The international crude oil benchmark Brent increased to about $86.14 per barrel on average terms from a previous average rate of $81.72 per barrel.
This represented a 5.41% increase in average price over the last two weeks. Following an initial steady grind upwards to $88.16 per barrel at close January 23. Brent crude oil price settled lower on Friday January 26, 2023, making the commodity’s weekly finish flat to lower.
On Friday, 27th January 2023, Brent closed trading at $86.66 after closing the day before at $87.28 per barrel, up from the year’s low of $72.50. The second pricing-window for January 2023 saw price increases for petroleum products on the domestic market.
Prices increased by some 9% and 6.67% for petrol and diesel respectively. Petrol per litre increased to ¢13.58, from ¢12.54, and diesel from ¢14.40 to ¢15.36; while the national average price of LPG was also pegged at ¢12.69 per kilogramme.
READ ALSO: Gold For Oil: Volumes Too Meagre To Cause Any Change In Pump Prices- COPEC
