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Cost of Living in Ghana Fuel prices to reduce first week in July

This is the projection of energy think-tank the Institute of Energy Security, who made their predictions based on anticipation of an increase in world fuel stock as well as an anticipated fall in fuel prices on the international market.

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Fuel Station in Ghana play

Fuel Station in Ghana

Fuel Prices are set to fall in the first week of July, 2016 when the fuel pricing window opens.

This is the projection of energy think-tank the Institute of Energy Security, who made their predictions based on anticipation of an increase in world fuel stock as well as an anticipated fall in fuel prices on the international market.

READ MORE: Chamber of Petroleum Consumers Fuel prices to go up 2%; COPEC unhappy

In a statement released by the think-tank and copied to Pulse.com.gh, IES said they expect Oil Marketing Companies to respond to these market factors and set competitive prices for their products.

Here is the full statement released by IES:

29th June 2016

NO INCREMENTS IN FUEL PRICES - IES              

After 14 days of trading in the second Pricing-window for June 2016, the Institute for Energy Security (IES) sampled 24 Oil Marketing Companies (OMCs) across the country and found that:

• The market recorded no increment on fuel price.

•  The Market recorded a reduction in price between 0.8% to 1. 41% over Diesel and Petrol

•  Six (6) Oil Marketing Companies namely; Goil, Shell, Allied oil, Agapet Oil, Glory Oil and Radiance Oil, made reductions to theprice of Diesel.

• Price reduction on Petrol were effected by Allied Oil, Agapet, Glory Oil and Radiance Oil.

• Goil lost significant share of its sales at the pump to the smaller OMCs especially in relation to Petrol as a result of the poor pricing strategy it adopted. Sales of Total Ghana shot up in the second window.

World Market Index

Platts, the benchmark for Diesel and Petrol prices went down by $8.9 /metric tonne and $ 10.01 respectively, representing 2% and 2.01% on Diesel and Petrol in the second window. Prior to these, prices for both Diesel and Petrol were trading at $445.10 and $524.77 per metric tonne on the world market. Also, Brent the benchmark for North Sea crude prices has been fairly stable over the period, falling to a low of $47.16 per barrel on 27th June 2016from the opening price of $48.97 per barrel.

Local Market Index

At the local Forex market, the Cedi recorded a marginal loss of 0.23% against the U.S. Dollar in the second Pricing-window. Also, the country’sPetrol and Diesel stock combined (onshore and offshore) as at 29th June 2016 stands at over 530million liters, and which is capable of meeting 7-weeks of national consumption; using May 2016 consumption of 305million liters as basis.

Local Market Price Projections

With the growth in national fuel stock from 6weeks to 7weeks, coupled with the falling fuel prices on the world market, as well as relative stability in the local currency; the Institute for Energy Security can project that prices of fuel on the local market would not see any upward adjustment but rather a drop (although marginal) in the first Pricing-window for the month of July 2016. IES also expects competition in the coming window to be keen among the Oil Marketing Companies, and trust that fuel prices would reflect the fundamentals of supply and demand in the next window which opens on 1st July to 15th July 2016.

Signed:

GILBERT RICHMOND ROCKSON

Principal Research Analyst, Petroleum Unit - IES

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