The chairman of the association, Kwaku Agyeman Duah, explained that the OMCs can only reduce prices after they recoup their investments.

The major factors that affect the fuel pricing in Ghana are the stability of the cedi, global oil prices and the tax components and margins of OMCs.

Currently, global developments such as the Coronavirus outbreak in China has led to a drop in demand for crude. This has also led to a drop in the price of the commodity. According to data from Bloomberg as of Wednesday afternoon, (February 26, 2020), a barrel of crude sold at $49.51.

On the same day, information from the inter-bank foreign exchange market showed that the Ghana cedi was relatively stable considering the fact that it recorded a year to date depreciation of 3%.

The various tax components that add up to the fuel price at the pump include the price stabilization levy which is triggered when prices drop on the global market. Currently, this is pegged at 12 pesewas per litre of petrol and ten pesewas per litre of diesel.

But the rate of reduction per OMC is largely dependent on how these three factors independently impact price margins.

In an interview with Accra-based Citi FM, Kwaku Agyeman Duah explained the reasons why they seem to be delaying in reducing the prices.

“Hitherto, there was no comment about it, we were sweating under diesel, diesel price was so high that the price of diesel we bought sometime ago wasn’t the actual price. We had to somehow subsidize it and we have not recovered. So the rate at which the diesel price was going up that’s not what we actually increased. That is why when we are coming down, you do not expect to have a proportionate for the price because that is where we also recover. The question you may ask is how long will this recovery last and that depends on the market forces.”

He said the price deregulation regime means that the players are allowed to set market prices without any regulatory interference.

Mr Agyeman Duah, however, said aside from the high cost of credit for some members of the Association, he was hopeful that consumers will enjoy a reduction in fuel prices if all other factors continue to demand that.