Fuel Shortage Looms As Bank Of Ghana Rations Dollars, Reports Bloomberg

Fuel Shortage Looms As Bank Of Ghana Rations Dollars, Reports Bloomberg

  • Ghana could be hit with a shortage of petrol and diesel in the coming days, according to a report by Bloomberg
  • The global business news network is blaming this on a decision by the Bank of Ghana to ration the release of dollars needed to buy the commodity on the international market
  • Bank of Ghana is offering about $100 million a month although $450 million would be needed to buy the commodity, says the report

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Ghana faces an imminent fuel shortage as the central bank rations dollars after oil prices surged following Russia’s invasion of Ukraine.

Drivers queue with gallons after a previous fuel shortage incident.
Drivers queue with gallons after a previous fuel shortage incident. Source: UGC.

According to Bloomberg, the monthly fuel import bill for Ghana jumped to $450 million in May, from $250 million in January, according to two people with knowledge of the matter.

The Bank of Ghana is only offering about $100 million a month at its foreign exchange auctions, and licensed bulk distributors can no longer plug the shortfall in the black market, the people said, asking not to be identified as the matter isn’t public.

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African governments face stark choices as Western sanctions on Russia disrupt global energy markets and prices soar. Though Africa is home to several major producers of crude oil, the continent has limited capacity to turn that into fuel for cars, trucks and planes.

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Ghana’s central bank is reluctant to spend its limited dollars on importing fuel, though it’s also looking at ways to boost its foreign exchange holdings, the people familiar said.

Those reserves stood at $8.34 billion at the end of April 2022, down from $9.7 billion at the end of last year, according to the central bank.

The nation’s challenge has been increased as the cedi weakened 22% against the dollar this year, the worst performance among African currencies tracked by Bloomberg.

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The country’s inflation rate jumped to 27.6% in May, the highest level in more than 18 years, as food and transport costs surged.

A spokesman at the Bank of Ghana could not immediately comment when reached by phone, and a spokesman for the Ghana Chamber of Bulk Oil Distributors also declined to comment, reports Bloomberg.

Fuel price increase: Further hikes in cost predicted by IES

Meanwhile, YEN.com.gh has reported in previous story that the Institute for Energy Security (IES), a think tank, has said its analysis points to a further hike in the cost per litre of fuel, even though there have already been marginal price increases.

According to available data, as of May 09, 2022, fuel prices stood at almost GH¢11 per litre, a marginal increase in price from the week prior.

In its latest analysis of the market for the second pricing window, IES has said the upward revision of petrol, diesel and LPG prices this week will be caused by rising international fuel prices, and the growing pockets of fuel shortages across the country, although the cedi appreciated against the dollar in the past two weeks.

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Source: YEN.com.gh

George Nyavor avatar

George Nyavor (Head of Politics and Current Affairs Desk) George Nyavor writes for YEN.com.gh. He has been Head of the Politics and Current Affairs Desk since 2022. George has over 9 years of experience in managing media and communications (Myjoyonline and GhanaWeb). George is a member of the Catholic Association of Media Practitioners Ghana (CAMP-G). He obtained a BA in Communications Studies from the Ghana Institute of Journalism in 2010. Reach out to him via george.nyavor@yen.com.gh.

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