At a time when the cedi is enjoying some form of stability against the dollar, Ghanaians least anticipated upward adjustment in fuel prices. However, they were proven wrong when some Oil Marketing Companies (OMCs) have announced their decision to adjust prices of petroleum products upwards at the pumps with immediate effect.

As a result of the increment, market leader, GOIL, witnessed a marginal rise in its fuel prices. GOIL now sells a litre of diesel at GH¢12.45, while petrol is going for GH¢12.40, going up from its old price of GH¢12.30. Similar to that of GOIL, Total Energies is selling a litre of diesel and petrol at GH¢12.45, from its previous price of GH¢12.30 pesewas per litre.

Shell is also selling a litre of diesel at GH¢ 12.45. It was previously selling a litre of diesel at GH¢ 12.30 and petrol at GH¢ 12.40. This means that prices have gone by 10 to 15 pesewas per litre with regard to some of the petroleum products.

Meanwhile, the reasons for the increase in prices have been mixed. While Total Energies linked the increment to the cost price of the Bulk Oil Distribution Companies, market leader GOIL is attributing it to the slight depreciation of the Ghana cedi to the Dollar.

There were initial indications that prices will remain stable at the pumps from July 16, 2023. However, the increment beats industry expectations and projections for the second pricing window for July 2023. Meanwhile, the development could negatively impact inflation going into the coming months.

Other OMCs also attributed the increase in fuel prices by OMCs to the depreciation of the cedi. An assertion which the National Petroleum Authority disagreed with, noting that the price increment at the pumps are not due to the depreciation of the cedi. “There hasn’t been any depreciation of the Ghana cedi from the reports of banks that I have seen,” it said.

The International Market Prices

According to some Bulk Oil Distribution Companies, the international market prices of finished petroleum products from June 7 to July 11, 2023 pricing window have changed marginally compared to the previous window. According to the BDCs, these are premiums used in pricing petroleum products from 16th to 31st July 2023.

The Bulk Oil Distribution Companies also maintained that crude oil prices on the world market within the period rose slightly by about $1.48/barrels per day (2.13%) to about $75.85/bbl. This was largely attributed to a cut in supply by giant oil-producing countries such as Saudi Arabia and Russia.

The BDCs noted that the price of LPG rose slightly this window after falling consistently since the past five windows.

This is despite the fact that prices of global petroleum products were largely affected by the bleak global economic outlook and the rising interest and inflation rates in the US in quarter 2, 2023.

These uncertainties regarding the US debt ceiling bill also accounted for the volatile petroleum product prices in quarter 2, which impacted prices at the pumps locally.

At the global stage, oil prices climbed more than 1% on Wednesday morning as a weaker U.S. dollar and expected decline in U.S. output outweighed softer-than-expected Chinese economic data.

Brent futures were up US $1.10, or 1.4%, at US $79.60 a barrel by 11 a.m. GMT, while U.S. West Texas Intermediate (WTI) crude rose US $1.22, or 1.7%, to US $75.37.

That cut Brent’s premium over WTI to its lowest since early June. The smaller premium makes it less likely energy firms will spend the money to send ships to the U.S. to pick up crude cargoes for export.