Fuel Prices To Drop Again In April Pricing Window – IES Predicts

The Institute of Energy Security (IES), is predicting a further drop in the prices of fuel on the local market between 16 and 24 percent in the first pricing-window for the month of April 2020.

This, the Institute attributes to the significant fall in the prices of Brent crude, gasoline and gasoil on the world market.

“Reference to the significant fall of 33.36% in Brent crude price, coupled with the considerable drop in the prices of Gasoline (51.29%) and Gasoil (27.96%) on the international market; the Institute for Energy Security (IES) foresees prices of fuel on the local market dropping by 16% – 24% in the first Pricing-window for April 2020, and in line with the Price Deregulation regime,” the Institute said in a statement.

However, the significant drop in the value of the Cedi, relative to the US Dollar in the last few days may also have an adverse effect on the selling price of fuel within the first Pricing-window of April 2020.

Local Fuel Market

Contrary to the National Petroleum Authority’s prediction of 15% reduction for the last Pricing-window under review, fuel prices at the pump experienced some 8.8% average reductions across some major Oil Marketing Companies (OMCs).

Earlier this month, the Institute called on government through the National Petroleum Authority (NPA), to bring pressure to bear on Oil Marketing Companies (OMCs), to reduce prices of fuel at the pumps to reflect the trend on the international market and the relative stability of the Cedi against the US Dollar.

For the period under review, “while Shell (Vivo) reduced Gasoil & Gasoline by roughly 4.3%, Goil and Total Ghana shaved-off approximately 11% for Gasoil and Gasoline, Zen Petroleum on the hand gave away a whopping 14% for both products to sell at Gh¢4.25 per litre; thus making it the OMC with the least selling price on the market,” the statement noted.

Today, the national average price of fuel per litre at the pump stands at Gh¢4.88 and Gh¢4.90 for Gasoline and Gasoil respectively.

Zen Petroleum, Benab Oil, Nick Petroleum, Frimps Oil and Champion Oil are selling the cheapest fuel at the pumps according to IES Market-scan.

World Oil Market

Crude oil prices declined at an average price of $30-margin for this window due to a drowning global oil market as a result of unmanageable surplus as world’s largest economies lockdown, cutting consumption by 25%.

As a result, Brent crude had a booming fall by 33.36% from $45.89 per barrel to close at $30.58 per barrel on average terms during the period under review.

Standard and Poor’s Platts benchmark for fuels shows average Gasoline price crashing by 51.29% to close at $211.52 per metric tonne, from a previous average of $434.23 per metric tonne; while Gasoil plummeted by 27.96% to close trading at $304.57 per metric tonne, from a previous average of $422.80 per metric tonne.

Local Forex

Figures compiled the Economic Desk from the Foreign Exchange market shows the Cedi depreciated by 4.68% against the U.S. Dollar, trading at an average price of Gh¢5.59 to the U.S. Dollar over the period under review. this saw a fall from a previous rate of Gh¢5.34 recorded in the first Pricing-window of March, 2020.

Reduce fuel by 20% – Minority to gov’t

The Minority has also called on the government and the Oil Marketing Companies (OMC’s) to further reduce fuel prices by some 20 percent as oil prices on the world market continue to tumble.

In a statement by the Minority, Adam Muktawakilu, ranking member for the Mines and Energy Committee in Parliament stated that due to the level of prices falling on the International markets, prices of fuel must be reduced by not less than 20 percent.

“Since the close of the second week of March 2020, prices of crude and finished products continue to tumble in the international market. The Minority Caucus has analysed the trends in prices of crude and petroleum products since the beginning of the year and is of the firm belief that prices at the pumps should be reduced by at least 20 percent.”

“A reduction of at least 20% is particularly imperative in view of the challenges facing Ghanaians in light of the measures introduced by Government to deal with the COVID-19 pandemic. The call for an additional reduction of 20 percent takes into consideration the fall of crude oil (31%+) and Petrol ( 50%+) on the international market over the last two weeks.

“A significant reduction in the prices of fuels in non-negotiable as the pandemic is exacting a toll on business and most companies are scaling down their operations with other laying off workers.”