Surging Fuel Prices Loom

Alex Kofi Mould - NPA Boss

The National Petroleum Authority (NPA) might increase the price of fuel, if the current world market price of crude oil remains the same in the next couple of days.

Crude oil sold at $80 a barrel in Asia yesterday; a new high for the year.

U.S light crude fell back slightly to $79.56, while London Brent remained unchanged at $77.77 a barrel.

The current price of the commodity means that the NPA would be forced to review petroleum products upward next week.

The NPA had maintained fuel prices since August because the price of the commodity on the world market had hovered around $70.

However, the latest world market price of the commodity, which began rising last week, would compel the regulator of the petroleum industry to increase prices.  

This would mean that petrol, which currently sells at GH¢1.11 per liter, representing approximately GH¢5.00 per gallon, would inched up, while diesel which also sells at GH¢1.12 per liter, representing about GH¢5.00 per gallon, would also go up.  

The same would apply to Kerosene and LPG which presently go for GHp86.45 per liter, representing GH¢3.90 per gallon and GHp79.00 per kilogramme.

Analysts say the short-term direction of oil is being driven by the dollar and rising equity markets.  

“I think crude oil prices will go up as we move into the fourth quarter.

“Investors believe that equity earnings are good guides for the economic outlook, but the 'better-than-expected' reporting season is supporting the oil price,” Mark Pervan said at ANZ.

However, there are concerns that sentiment, rather than fundamentals, are driving the crude oil price and that once certain fundamentals re-establish themselves, the price may fall.

The fundamentals include spare capacity, stockpiles and weak demand of the commodity in industrialized nations.

Analysts had earlier indicated that the most important commodity in the world would sell at $80 by the end of the year.

By Charles Nixon Yeboah