The Association of Ghana Industries (AGI) has strongly advocated a further reduction of petroleum prices even as prices drop by 15 per cent with effect from Monday.
The President of the association, Mr Asare Adjei, told the GRAPHIC BUSINESS in an interview that “the prices of petroleum products are pegged at the dollar and so if the cedi has gained some considerable strength against the dollar, we should see a corresponding reduction by as much as 22 per cent on the prices and any other products that are pegged at the dollar.”
The dollar, which went for GH¢4.32 at the end of June this year, has fallen to GH¢3.66 (as at July 8) while the British Pound which was exchanged for GH¢6.81 is now at GH¢5.62.
The Euro has also dropped from GH¢4.84 on June 30 to GH¢4.05 as at July 8, the Bank of Ghana daily interbank forex rates have revealed.
This positive trend has been attributed to the intervention of the central bank which is pumping about US$20 million a day into the market as against the daily demand of $14 million.
In the last couple of months, petroleum prices have been increased by more than 20 per cent because of what the players in the petroleum industry described as the effect of exchange rate.
Again, the crude oil prices on the international market has remained stable at about US$58, an indication that the Bulk Oil Distribution Companies (BDCs) have no justification to keep the prices of the products at the current price at the pumps across the country.
Since the government endorsed the full deregulation of the petroleum sector, as per the conditionalities of the International Monetary Fund (IMF), prices of petroleum products have been going up.
The BDCs attribute the cause for their action to the depreciation of the Ghana cedi and, therefore, as the local currency has shown some strength, it will not be out of place to see the prices drop accordingly.Cedi gainsOn the cedi gaining strength against the dollar and other major foreign trading currencies, Mr Asare Adjei said the present trend will help businesses to forecast and plan.
“We have had serious challenges because we are not able to plan; we plan today to import raw materials and by the time we get to the bank, the figures have changed and we are forced to change more cedis to get the dollar equivalent,” he stated.
According to him, the present phenomenon will help businesses to plan.
“What has been done must be sustained to boost confidence in the economy,” he added.Public warnsMeanwhile, some consumers have supported the AGI call for a reduction in the prices of petroleum products at the pumps.
In a random interview, they stated that “if the prices of the products were increased because the cedi was falling, it sound to reason that the prices of the products should go down now that the cedi is doing well.”
Mr Martin Adjare, a civil servant, added: “They don’t need to be told about this. They should do the honourable things and we will all be free.”