Fuel prices may remain stable for rest of November

16.11.2021 LISTEN

The Institute of Energy Security (IES Ghana) is projecting stability in Gasoline and Gasoil prices for the rest of November.

The IES in a statement released on Tuesday, November 16, 2021 noted that world prices have seen some decreases and it does not foresee any increase, at least for the rest of November.

"For the November second Pricing-window, and based on the 1.54 percent decrease in the price of international benchmark Brent crude, the 2.40 percent increase in price of Gasoline, the 0.74 per cent increase in Gasoil price and the 0.16 per cent depreciation of the local currency against the US Dollar; the Institute for Energy Security (IES) foresee prices of fuel remaining stagnant for the window, despite the increase in price of finished products. This is in due to the recent increases in prices at the pumps which has generated a lot of public concern," It said in a statement signed by Fritz Moses, Research Analyst.

In its review of the November First Pricing Window, it noted that right from the beginning of the window, prices of petroleum products recorded significant upward reviews from the major Oil Marketing Companies (OMCs) with Total Petroleum Ghana leading the charge.

“Prices of Gasoline and Gasoil at the pump increased by roughly GHp10 per litre, in spite of the suspension of the Price Stabilization and Recovery Levy (PSRL) by the National Petroleum Authority (NPA),” it noted.

The price increases recorded brings the national average price of fuel per litre in Ghana to Gh¢6.81 per litre for Gasoline (Petrol) and Gh¢6.79 for Gasoil (Diesel), from Gh¢6.64 for both Gasoline and Gasoil.

Ghanaians have been lamenting the soaring fuel prices, putting some pressure on government to reduce some taxes on the price build-up to cushion the citizens.

The full statement has been published below:

16^TH NOVEMBER 2021

GASOLINE AND GASOIL PRICES MAY REMAIN STAGNANT

REVIEW OF NOVEMBER FIRST PRICING-WINDOW

Local Fuel Market Performance

The price of fuel on the local Ghanaian market experienced an increment within the first pricing-window of the month of November 2021. Right from the beginning of the window, prices of petroleum products recorded significant upward reviews, from the major Oil Marketing Companies (OMCs), with Total Petroleum Ghana leading the charge. Prices of Gasoline and Gasoil at the pump increased by roughly GHp10 per liter, in spite of the suspension of the Price Stabilization and Recovery Levy (PSRL) by the National Petroleum Authority (NPA).

As per the IES Marekt-Scan, Benab Oil, Zen Petroleum, Cash Oil, Goodness Oil and Top Oil stands as the OMCs that sold the least-priced fuel on the local market, for the pricing-window under review.

World Oil Market

The International Benchmark Brent Crude saw its price tumble within the period under assessment with price selling on average at about US$83.25 per barrel mark, a 1.54 percent decrease from the previous window's average price of US$84.55 per barrel mark.

The price of the Brent Crude suffered the usual volatilities on the back of the constant geopolitical issues with OPEC+, the United States of America, and the return of global economies from the impact of the pandemic.

Source: IES Construct 2021, with data from oilprice.com , Reuters & Economic Times

Brent has fallen for a third week in a row, underpinned by a strengthening US Dollar resulting from US inflation rate surge fueling rate hike speculation; dampening foreign demand for Crude. Contributing to the price fall is the speculations that President Joe Biden's administration might draw down U.S. Strategic Petroleum Reserve (SPR) to take some of the heat offprices. In addition, demand prospects have soured a bit lately as OPEC cut its Q4 2021 oil demand forecast by 330,000 barrels per day as high energy prices and inflation hamper economic recovery.

The current happening on the global oil market goes to show the role played by policy-makers, and prompting the market that prices are not only influenced by the supply-demand orientation, but also from monetary policy forecasts coupled with diverse government interventions.

The price of the refined products such as Gasoline and Gasoil as monitored on Standard and Poor’s global Platt’s platform also shows some changes within the period under review. The price of Gasoline increased by about 2.40 percent to close the window at US$837.21 per metric tonne from its earlier price ofUS$818.21 per metric tonne. Price of Gasoil also increased within the period by 0.74 percent to close trading at US$720.50 per metric tonne from its earlier price of US$715.23 per metric tonne in the second window of October 2021.

Local Forex

Data monitored by the IES Economic Desk from the Foreign Exchange (Forex) market shows that the Cedi further depreciated against the U.S. Dollar by 0.66 per cent to close trading in the last window at Gh¢6.13 to the US Dollar from the previous window’s Gh¢6.09 to the greenback.

PROJECTIONS FOR NOVEMBER 2021 SECONDPRICING-WINDOW

For the November second Pricing-window, and based on the 1.54 percent decrease in the price of international benchmarkBrent crude, the 2.40 percent increase in price of Gasoline, the 0.74 per cent increase in Gasoil price and the 0.16 per centdepreciation of the local currency against the US Dollar; the Institute for Energy Security (IES) foresee prices of fuelremaining stagnant for the window, despite the increase in price of finished products. This is in due to the recent increases in prices at the pumps which has generated a lot of public concern.

Signed:

Fritz Moses

Research Analyst, IES

( [email protected] )

For media engagements, kindly reach Fritz Moses on 0241681742 or Derick Xatse on 0240851221.