Fuel price hikes: ‘Free-fall of cedi a major problem’ – NPA

  Tue, 18 Oct 2022
Oil and Gas Fuel price hikes: ‘Free-fall of cedi a major problem’  – NPA

The National Petroleum Authority (NPA) has expressed concerned about the continuous fall of the cedi and its impact on the price build-up of petroleum prices.

It says the high exchange rate is mainly affecting the prices of fuel at the international market as well as the cost of importation or production of same thus resulting in increases in the cost of petroleum products.

The price of fuel has recently increased to almost GH¢16 per litre with players in the industry warning that a litre of the product could be sold at almost GH¢20 by the end of 2022.

“The cedi is a major problem. The most volatile items in there in determining the ex-pump prices are the exchange rate and the world market price. We are really exposed to the exchange rate, which has continuously depreciated”, said Abass Tasunti, Head of Economic Regulation at NPA.

The cost of diesel is currently pegged at GH¢15.99 at a top oil marketing company, Total Energies, while the cost of gasoline is GH¢13.10.

This represents a significant increase over the GH¢11.06 per litre for gasoline and GH¢13.95 for diesel earlier in the month.

Speaking on The Point of View on Citi TV, Abass Tasunti said an ‘intervention is necessary to check the cedi to dollar exchange rate.

“The rate also affects the supply of the product because if the cedi is not available and the BDCs bring the product, they will not be able to pay the suppliers, and we will have challenges. Availability of the dollar is key. So the Bank of Ghana needs to do something about the forex so the BDCs are able to get the dollar at a preferential rate to help in stabilizing the ex-pump price”, he added.

The country's rapidly rising fuel prices, which began in January at roughly GH¢6.5 per litre, have mostly been linked to the increase in the price of fuel on the international market.

Crude oil was selling for about $75 per barrel in January of this year, but it is now selling for roughly $86 per barrel.

On the other side, the dollar, which cost GH¢6.5 at the beginning of the year, is now worth about GH¢12.