The Institute for Energy Security (IES) has predicted a rise in fuel prices at the pump in the month of March.
This was communicated in a statement, signed by the Research and Policy Analyst of the IES, Mikdad Mohammed, and released on Thursday, February 28, 2019.
“These expected increments in prices of fuel are occasioned by the 6.33% rise in average Brent crude price, a corresponding 8.81% and 5.56% increase in prices of Gasoline and Gasoil on the international market respectively, and finally a cumulative depreciation of the Cedi against the U.S dollar,” sections of the statement from the IES reads.
The IES said fuel prices will soon go past the Ghc5 mark, while listing a number of factors which have accounted for the increment.
Read the IES’ full statement below:
REVIEW OF FEBRUARY 2019 SECOND PRICING-WINDOW
Local Fuel Market Performance
In the Pricing-window under review, fuel prices as set by Oil Marketing Companies (OMCs) largely remained stable with a few marketers reviewing prices downwards to either attract or maintain their share of the fuel market. Some select-OMCs even reviewed their prices downwards in the window. Consequently, average prices of both Gasoline and Gasoil stood at GH¢4.94 and GH¢4.93 respectively. IES Market-scan of fuel prices among OMCs showed Benab, Pacific, Telenergy, Zen, Fraga, Frimps Oil, Star Oil, Radiance, SO Energy, sold the least-priced fuel on the market relative to other OMCs.
World Oil Market
On morning of Monday, the 25th of February, U.S President Donald Trump fired a tweet at OPEC that seemed to have triggered a wide price decline from Friday’s trading price of $67.25 per barrel to $64.91 per barrel close of day on Monday. Crisis-ridden oil producer, Venezuela has been unable to find buyers for its oil owing to intensified U.S sanctions. As a result, average Brent crude price increased from $61.68 per barrel in the last Pricing-window to $65.59 per barrel; representing an increment of 6.33%. Finished product prices have also saw increments as Standard and Poor’s Platts benchmark shows both Gasoline and Gasoil went up by 8.81% and 5.56% respectively. Gasoline which was previously trading at $507.86 per metric tonne is now trading at $552.61 per metric tonne. Gasoil is also trading at $609 per metric tonne up from its previous price of $576.93 per metric tonne.
Local Forex and fuel stock
The past three Pricing-windows has seen the Cedi wobble against major international currencies. The last Pricing-window saw the Cedi depreciate by 3.96%. In the present window, figures computed by IES Economic Desk shows the cedi has depreciated by another 2.88%; from GH¢5.20 in the last window to a current trading rate of GH¢5.35. From February 16, 2019 to date, total petroleum imports recorded stands at 380,975 metric tonnes; 185,100 metric tons of Gasoline, 150,875 metric tonnes of Gasoil, 20,000 metric tonnes of ATK and 25,000 metric tonnes of Fuel Oil were imported into the country.
IES PROJECTION FOR THE FIRST PRICING-WINDOW OF MARCH 2019
The Institute for Energy Security (IES) is highly certain that fuel prices in the First Pricing-window of March 2019 will cross the GH¢5 mark, despite the forfeiture of the Price Stabilization and Recovery Levy (PSRL) mechanism by the National Petroleum Authority (NPA). These expected increments in prices of fuel are occasioned by the 6.33% rise in average Brent crude price, a corresponding 8.81% and 5.56% increase in prices of Gasoline and Gasoil on the international market respectively, and finally a cumulative depreciation of the Cedi against the U.S dollar.
Signed: MIKDAD MOHAMMED
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