Fuel Prices Up

Alex Mould - NPA boss

Fuel prices have gone up by 5 percent with effect from Saturday, October 31, 2009.

According to the National Petroleum Authority (NPA), regulator of the petroleum industry, the increment was across board for all petroleum products.

This means that petrol, which was selling at GH¢1.11 per liter, representing approximately GH¢5.00 per gallon, would now go up slightly, while diesel which previously went for GH¢1.12 per liter, representing a little over GH¢5.00 per gallon, would also go up.

Similarly, Kerosene and LPG which previously sold at GHp86.45 per liter, representing GH¢3.90 per gallon and GHp79.00 per kilogramme respectively, would also increase.

Earlier this week, reports suggested that government had made frantic efforts to absorb the increment to avert sharp criticisms from the public, but the conditionalities of the International Monetary Fund (IMF) and World Bank had prevented it from doing so.

However, after a meeting between stakeholders on Friday, a decision was reached to pass on the marginal price increases to consumers.

The new prices had therefore been communicated to the Oil Marketing Companies (OMCs).

Meanwhile, checks by CITY&BUSINESS GUIDE indicate that there were artificial shortages of the commodity as fuel stations allegedly hoarded the commodity for purposes of making more profits.

The upward adjustment in fuel prices had become necessary because crude oil was hovering around $79 on the world market.

Just a couple of weeks ago, renowned global investment banks including Goldman Sachs had reviewed their earlier prediction that oil could end the year at $75, adding that the recent global financial crisis, coupled with a weak U.S dollar might push the price of the commodity further.

“We are revising our forecast range for oil up from $70 to $80 for the rest of the year from $65 to $75. Cold temperatures in the US have also been very price supportive.

“Sentiments are moderately positive and the fundamentals do not necessarily justify higher prices, but the trend of a weaker dollar has given a big boost,” said Sumisho Sano, General Manager of Research at SCM Securities in Tokyo.