The Institute for Energy Security (IES) has predicted that prices of petroleum products may stay same for the next two weeks despite reduction in the prices of finished products on the world market.

According to the Institute for Energy Security, the significant drop in the value of the Ghana cedi against the US dollar in the last two weeks might thwart the expected fuel price reductions in the coming weeks.

In its projection of petroleum prices for this pricing window, the energy think tank said data from the IES Economic Desk on the domestic foreign exchange (forex) market over the last two weeks showed that the Ghana cedi closed trading at GH¢12.01 to the US dollar, from GH¢11.55 at the start of the window. This led to a loss of about 3.98 per cent in value.

“Prices of all petroleum products monitored by the Institute for Energy Security (IES) on the international market fell, alongside the price of Brent crude over the last two weeks. Prices of Gasoline (petrol), Gasoil (diesel) and Liquefied Petroleum Gas (LPG) fell by 3.56 per cent, 3.69 per cent and 2.37 per cent respectively, over the period. On the domestic front, the Ghana cedi lost a value of roughly 3.98 per cent against the US dollar, as monitored on the foreign exchange market.”
IES

Fuel prices went up marginally in the just ended pricing window. Meanwhile, crude oil prices extended last week’s losses and traded lower at $83.3 per barrel for Brent crude at the end of the pricing-window under review, from an initial average price of $85.29 per barrel.

The prices were weighed down by lingering concerns about demand amid economic growth worries.

The second pricing-window for April 2023 saw domestic petroleum products prices make some recoveries at the pump in respond to rising international commodities prices, as recorded in the first-half of April 2023.

The IES’ monitoring of various Oil Marketing Companies (OMCs) during the pricing window under review finds the national average price per litre for petrol at GH¢12.76p, diesel at GH¢12.86p and LPG at about GH¢11.60 per kilogramme; clearly showing the price increase at the pump, except for LPG.

2023 Global Oil Forecast

Following an 80 kb/d contraction in 4Q22, world oil demand growth is set to accelerate sharply over the course of 2023, from 710 kb/d in 1Q23 to 2.6 mb/d in 4Q23. Average annual growth is forecast to ease from 2.3 mb/d in 2022 to 2 mb/d, and global oil demand to reach a record 102 mb/d. Rebounding air traffic and the release of pent-up Chinese demand dominate the recovery.

World oil supply leapt 830 kb/d in February to 101.5 mb/d as the US and Canada rebounded strongly from winter storms and other outages.

It is expected that non-OPEC+ will drive global output growth of 1.6 mb/d this year, enough to meet demand in 1H23 but falling short in the second half when seasonal trends and China’s recovery are set to boost demand to record levels.

Global refinery throughputs reached a seasonal low in February at 81.1 mb/d, as the muted recovery in the US merged with the start of planned seasonal maintenance elsewhere. Despite the collapse in middle distillate cracks, refining margins remain healthy, especially for those running discounted Russian crude and feedstocks. It is expected that 2023 will runs to average 82.1 mbd, up 1.8 mbd y-o-y.

Russian oil exports fell by 500 kb/d to 7.5 mb/d in February as the EU embargo on refined oil products came into force. Shipments to the EU fell by 800 kb/d to 600 kb/d, compared with more than 4 mb/d at the start of 2022. Sailings to China and India also fell, while cargoes without a destination surged by 600 kb/d to 800 kb/d. Export revenues plunged another $2.7 bn to $11.6 bn, down 42% on a year-ago.