The National Petroleum Authority (NPA) has explained that Oil Marketing Companies (OMCs), have been given room to continually increase prices at the pumps, in order to prevent shortage of petroleum products.
Petrol is currently selling at a minimum of 17 cedis, while diesel sells at a minimum of 22 cedis for the first pricing window of November. However, some oil marketing companies, adjusted their prices even before the pricing window.
It comes as the President, Nana Akufo-Addo’s announcement that his government is working to secure reliable and regular sources of affordable petroleum products for the Ghanaian market to stabilise fuel prices.
Addressing the nation on the economy on Sunday night, the President said the move, in addition to a stable currency, would, “halt the escalation of fuel prices and bring relief to us all.”
The NPA, had in a statement dated October 31, 2022 and titled; “Suspension of Subsidy on Residual Fuel Oil Effective 1st November 2022”, advised “the industry of the suspension of the subsidy on RFO effective 1st November 2022 until further notice”.
It explained that “the suspension of the policy to subsidize RFO is in line with the directive from the Ministry of Energy as an interim measure to ease the financial burden on the Price Stabilization and Recovery Account (PSRA)”.
The letter signed by NPA’s Chief Executive , Dr Mustapha Abdul-Hamid, further explained that “the Policy directive takes into consideration the growing concern about the sustainability of the Account to meet under-recovery payment obligations for Premix Fuel and RFO”.
It informed stakeholders “that the NPA will continue to compute and announce the price build-up of RFO for each pricing window, as it has always done, to industry”.
In a follow-up interview with Citi News, the Director of Communications at the NPA, Mohammed Abdul-Kudus, indicated that the oil marketing companies, were left with no options following the constant depreciation of the Ghana Cedi.
“Given the fact that the products are actually bought from the world market in dollars, anytime the dollar changes, it affects the character of the pricing.”
“Yes, we ought to have been operating with the two weeks window framework, but because of the volatility of the cedi against the dollar, and the fact that you ought to be a little flexible with what will be established with the windows within which the prices are supposed to be varied.”
The price of diesel has shot up to GH¢23.49 per litre, according to latest prices advertised by TotalEnergies at the pumps.
Petrol is selling at GH¢17.99 per litre, while Kerosene is selling at GH¢14.70.
The new prices took effect from Tuesday, November 1, 2022.
The Institute for Energy Security (IES) had predicted that petrol and diesel prices will hit GH¢18 and ¢20 per litre for the November 2022 first pricing window.
The IES, however, noted that, unfortunately, the 1.43% fall in the price of LPG on the world market might not translate into a reduction at the domestic pump, as it may offset the cedi’s depreciation, and rather force the price of the commodity to rise further in the coming days.
Fuel prices were increased twice in the month of October 2022.
President Akufo-Addo on Sunday, October 30, 2022, said his administration is working on bringing affordable petroleum to the country to slow the rampant hikes at the pumps.
“I know that the increasing cost of living is the number one concern for all of us. It is driven by fast-escalating fuel prices at the pumps, caused by high crude oil prices on the world market and our depreciated currency. I know that this is putting intolerable pressure on families and businesses.”
“I know that people are being driven to make choices they should not have to make, and I know that it has led to the devaluation of the capital of traders and painfully accumulated savings.”
The president added that “the government is working to secure reliable and regular sources of affordable petroleum products for the Ghanaian market. It is expected that this arrangement, when successful, coupled with a stable currency, will halt the escalation of fuel prices and bring relief to us all.”
“In IES’ estimation, Gasoil’s price per litre is set to break the GHS20.00 mark, with a gallon price possibly going for GHS90.00 on the market. Gasoline price may also inch close to GHS18 per litre by mid-November 2022,” it said in its review of the October 2022 Second Pricing Window.
The IES, blamed the projected increment on the “significant” depreciation of the Cedi and the “appreciable” increase in the price of diesel on the international market. “The Ghana Cedi depreciated by a whopping 32 per cent from the previous rate of GHS10.89 to the current rate of GHS14.42, to the US Dollar,” it said.
