Fuel Prices Up Today!

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Fuel prices are most likely to go up today with pricing window widely opened, but stakeholders, including the National Petroleum Authority (NPA) is hesitant to pull the plug afraid of public backlash, but the Association of Oil Marketing Companies (AOMC) Chief Executive Officer (CEO) insists in the face of “eroding margins” they cannot wait any longer.

Kweku Agyemang-Duah, told The Herald that the losses are becoming unbearable for the AOMCs, leaving them without a choice, than to increase the price immediately.

This week saw the January pricing widow opened to last till March, but in the face of rising crude oil prices and a wobbling cedi against the US dollar, the AOMC’s, are said to be waiting for Ghana Oil (GOIL) to increase its prices for the other private oil marketing firms to follow, however, government is said be holding them (GOIL) back, hence keeping everyone else waiting.

Insiders, told The Herald the price of petrol in particular, will move up from the current 5.41 per a litre to 5.71 per a litre, meaning consumers will be paying US$1 per a litre of petrol.

Government was blamed for preventing GOIL from increasing its prices to enable other companies do same, to recover their investments.

It was revealed that, the private oil companies are making losses in the region of GHC50 million monthly per company. This to them, has made business unprofitable.

The AOMC’s boss, discounted the claim that GOIL, had blocked the increment, saying any of the 145 companies, could increase, because the law allows them to do so, but they were being tactful.

He suggested the increment, had to be uniform to enable all the companies recoup their cost, pay workers and also ensure security of their stations.

Mr Agyemang-Duah, indicated that the wait was over and that the companies, will from today begin to increase the prices of their wares.

To be able to do a full cost recovery, the AOMC boss, told this paper that their research has shown that diesel will be going for GHC5.82 and GHc5.56 for petrol, but he is not sure if this will be agreed by all the companies.

Mr Agyemang-Duah, pegged the losses to the individual companies at between GHC30 to GHC40 million, and suggested something must be done as quickly as possible to help save the industry.

The Institute for Energy Security (IES) had predicted that oil marketing companies will likely increase the prices of their petroleum products to make up for the marginal price movement of crude oil on the international market.

“Taking into consideration the two percent increment in prices of Crude oil, coupled with the 0.95 percent and 1.01 percent marginal increment in the prices of Gasoil and Gasoline respectively on the international market; the Institute foresees prices of fuel on the local market losing stability,” the energy policy think tank said in a press release.

Currently, the national average price of fuel per litre at the pumps is still pegged at GH¢5.36 for both petrol and diesel after a scheduled increase in their prices in the first weeks of 2020 was averted by the NPA with the application of the Price Stabilization and Recovery Levy (PSRL).

While the exchange rate performance — a key determinant in the price build-up — improved, the energy policy think tank, argues that it would still not be enough to offset the increase in prices of oil on the international market.

Crude oil prices continue to remain above the US$60-dollar margin for this window. Escalation of tension between the United States and Iran, saw Brent Crude gaining 6 percent to reach US$70.24 per barrel – the first time prices have hit that amount in more than six months.

Oil prices tumbled as President Donald Trump, signalled tensions with Iran eased. Over the last two weeks, Brent crude rose marginally from $65.43 per barrel to close at $66.74 per barrel on average terms.

 

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