Some Oil Marketing Companies (OMC) have started reducing the prices of petroleum products at the pumps. Meanwhile, this is the second time fuel prices have been reduced this year.
Per the checks, GOIL which is the market leader of the OMCs led the reduction in prices. A litre of petrol is now going for GH¢14.50. This represents almost 5 per cent reduction from the previous price. Diesel, on the other hand, is going for GH¢14.90, showing a price reduction by almost 3 per cent per litre.
The reduction is in line with the two-week review in prices which has been influenced by a fairly stable cedi and prices of Petroleum Products on the International Market.
Earlier, the Institute for Energy Security (IES) predicted that prices of petrol and diesel were expected to drop significantly between 7.1 per cent and 10.8 per cent at the pumps, from Thursday, February 16, 2022. According to the IES, petrol was expected to sell at about GH¢14.40 per litre, and diesel going for about GH¢13.90 per litre.
But the IES noted that the price of a kilogramme of LPG may sell at GH¢14.70 before the close of the second pricing window for February 2023. “The fall in prices of petrol and diesel is due to a marginal appreciation of the cedi to the dollar and drop in the prices of petrol and diesel globally,” the IES iterated.
Happenings in the World Oil Market
Oil prices edged lower on the international market after a large build in U.S. crude inventories but continued to trade in a narrow range as hopes for a Chinese demand recovery remained in focus.
Brent crude futures fell 36 cents or 0.42 per cent to $85.02 a barrel. U.S. West Texas Intermediate (WTI) crude futures were down by 29 cents or 0.37 per cent at $78.30.
Prices were pressured by last week’s larger-than-expected build in U.S. crude oil stocks. Stocks rose to the highest level since June 2021, the Energy Information Administration (EIA) said on Wednesday. The build was largely because of a data adjustment, which analysts said muted the impact on oil prices.
“Brent failed again to move above the 100-day moving average this week. Together with a large crude build in the U.S., prices remain under downward pressure,” UBS analyst, Giovanni Staunovo.
The Brent benchmark has been swinging within an $80-$90 a barrel range for the past six weeks while WTI has ranged between $72 and $83 since December “Oil prices are very choppy at the moment, with traders having a lot to take in,” OANDA analyst, Craig Erlam, said in a note, pointing to Russia’s 500,000 bpd cut to oil production in March, a strong Chinese economic recovery and an uncertain global economic outlook.
China will account for almost half of global oil demand growth this year after relaxing its COVID-19 curbs, the International Energy Agency (IEA) said on Wednesday.
On the supply side, the market is keeping a close eye on Russian oil production. “It is open for interpretation of how the country’s oil production will be affected by international sanctions or to what extent the invader would go to use oil as leverage,” said Tamas Varga of oil broker PVM.
Russian oil exports were down in January by only 160,000 bpd from levels before the war in Ukraine, but about 1 million bpd of production will be shut in by the end of the first quarter, the IEA said.