The government’s reduction of margins in the petroleum price build-up by a total of 15p/ltr is expected to end on June 30, 2022. This presents a situation that could send fuel prices skyrocketing even further.
While the suspension of the margins were expected to reduce prices of petrol by 1.6% and diesel by 1.4% for the period of three months, they were not enough to meet their intended purpose of stabilizing fuel prices, as fuel prices have continued to rise since then.
The government’s measures include a 2 pesewas per litre reduction in the BOST margin; reduction of the Unified Petroleum Pricing Fund (UPPF) margin by 9 pesewas per litre; a 1 pesewa per litre reduction in Fuel Marking Margin; and a 3 pesewas per litre reduction in Primary Distribution Margin (PDM).
The Minister of Finance, Ken Ofori-Atta, rolling out these measures, said:
“Unlike in other countries where the hike in crude oil prices and exchange rate volatility are leading to shortages in supply of petroleum products, government is implementing measures to guarantee constant supply of petroleum products. To mitigate the impact of the rising price of petroleum products at the pump, for the next three months, government has decided to reduce margins in the petroleum price build-up by a total of 15 pesewas per litre with effect from 1st April.”Ken Ofori-Atta
Reduction of Margins Near end
According to the Ghana Chamber for Bulk Oil Distributors (CBOD), total taxes and regulatory margins for the first pricing window of June 2022 remained unchanged relative to the previous selling window. Total taxes and regulatory margins for the window stood at Ghp228/ltr for gasoline, Ghp226/ltr for gasoil and Ghp144/kg for LPG, accounting for 23% and 18% of ex-pump prices of gasoline and gasoil respectively.
“The relatively low contribution of Taxes and Regulatory margins in the ex-pump prices are largely due to the government reduction of margins on the petroleum price build-up by 15 pesewas for the period of three months, which is expected to end on 30th June 2022.”CBOD
For the first pricing window, the average ex-pump prices for gasoline and gasoil increased by an average of 4% and 3% relative to the previous selling window, rising from an average of GHS9.706/ltr and GHS11.989/ltr in the previous window to GHS10.073/ltr and GHS12.319/ltr respectively.
For the second pricing window of June 2022, prices for gasoline and gasoil sold by some Oil Marketing Companies (OMCs) such as TotalEnergies stands at GHS10.99 per litre and GHS13.50 per litre respectively.
Petroleum Stocks Available
The total petroleum stocks available in the country at the beginning of the week, Monday June 13, 2022, comprised of Gasoline, Gasoil, LPG, ATK, Kerosene, Premix and RFO, CBOD noted.
Expected cargoes of petroleum products scheduled for this week (13th-18th June 2022) include a total of about 157.74 million litres of petroleum products comprising of gasoline and gasoil are expected to be imported within the period. An expected volume of about 41,420,050 litres of Gasoil and 116,329,511 litres of Gasoline are to be imported within the reporting period, according to CBOD.
A total of about four Bulk Distribution Companies (BDCs) are importing these products for the period under consideration. Currently, two vessels are at anchorage and one other vessel has been given the clearance to discharge, CBOD noted in its market outlook report.
The Residue fluid catalytic cracking (RFCC) unit at TOR remains shutdown due to reconstruction whiles Crude oil Distillation Unit (CDU) is also shut down due to lack of crude oil, CBOD noted. According to the Institute for Energy Security (IES), the President, Akufo-Addo must save the State facility which is saddled with over GHS400 million debt, from total collapse.
“After close to 6 years of poor management of this vital state institution, the refinery sits idle and hopeless; losing out on the prospects of the Russian-Ukraine conflict, plus the potential of generating that synergy between the upstream and the downstream sectors of the Ghanaian petroleum industry.”IES