The Institute of Energy Studies has projected fuel prices to rise by 25 pesewas per litre from tomorrow, February 1, 2021, on the condition that the suspended Price Stabilisation and Recovery Levies (PSRL) is reintroduced.
This comes on the back of an 8.52 per cent increase in the price of Brent crude, a 5.5 per cent rise in price of LPG, a 6.23 per cent increase in price of gasoline, and 9.86 per cent jump in gasoil price; all on the international oil and fuel markets. Also, a marginal depreciation of the cedi to the US dollar during the past two weeks is attributed to this rise.
“Over the next two weeks, the Institute for Energy Security (IES) foresees the prices of Liquefied Petroleum Gas (LPG), diesel, and petrol recording yet another jump at the pump, despite a suspension of the Price Stabilisation and Recovery Levy (PSRL).
IES
“Further depreciation of the Ghana cedi against the US dollar on the foreign exchange (forex) market adds on to the factors that will push up the prices of the commodities on the local market”, the Institute noted.
The Institute of Energy Studies noted that, by this likely increase in price, this will move “all the major Oil Marketing Companies crossing the GHS7 per litre mark for gasoil and gasoline, moving the price increases for both products over the past six months beyond the 16 percentage mark recorded at the end of January 2022”.
During the last pricing window, some oil marketing companies (OMCs), including Puma Energy, Ready, TotalEnergies, EV, were spotted selling diesel above GHS7 per litre for the first time.
Benab Oil, Dukes Oil, Star Oil, Reliance, Goodness Oil and Westport were among the OMCs with the least-priced fuel on the local market.
Over the last two weeks, petrol and diesel prices rose by roughly 3 per cent, from GHS6.70 a litre on average terms at most pumps to reach ¢6.94 per litre. The current national average price for petrol is pegged at GHS6.90 per litre, while diesel stands at GHS6.98.
Global Oil Market
On the global oil market, crude oil reached $90 this week, the first time since the price rally began in 2021. This latest episode of a price rise was attributed to the geopolitical tensions ongoing between Ukraine and Russia, albeit only transitory, according to market analysts.
Meanwhile, this price rise is expected to be the beginning, as the outlook of the industry points to further price increases, as OPEC spare capacity continues to decline. While several reasons have been given for the decline in spare capacity, chief among them appears to be underinvestment.
Following this concern, JP Morgan earlier remarked that oil price could hit $125 per barrel as OPEC’s spare capacity falls to 4 per cent of total capacity by fourth quarter of 2022.
The International Energy Agency (IEA) has warned that OPEC scare capacity could fall by half to 2.6 million barrels per day in the second half of the year.
The IEA further said: “if demand continues to grow strongly or supply disappoints, the low level of stocks and shrinking spare capacity means that oil markets could be in for another volatile year in 2022.”
