Fuel Prices To Rise: Review Of August 2017 First Pricing-Window

Local Fuel Market Performance

For the first Pricing-window in August 2017, the local fuel market recorded upward adjustments in prices at the pump as anticipated in the previous review. This was largely attributed to the introduction of the long awaited new fuel standards announced by the National Petroleum Authority (NPA) in May 2017, which finally took effect on 1st August 2017.

IES can confirm that 50ppm fuels are being sold by a number of Oil Marketing Companies (OMCs), as the regulator enforces the new directive. Gasoline (Petrol) and Gasoil (Diesel) recorded an average price change of 4.48%, with the average prices of Gasoline and Gasoil going for Ghs3.96 per litre and GHS3.94 per litre respectively.

As at today, IES Market-scan can confirm that Lucky Oil, Compass Oleum, Frimps Oil, Puma Energy and Sky Petroleum are selling the lowest priced fuel at the pump.

World Oil Market Prices

Figures from the international fuel market shows that Brent crude price continue to rise. From a previous average price of $49.38 per barrel to a current average of $52.19 per barrel, a price change of 5.67% is recorded. This is as a result of OPEC’s curbing of supply to drive prices upwards, and U.S. inventory falling.

According to Standard and Poor’s Platts, Gasoline and Gasoil prices shot up again for the period under review. Gasoline recorded an upward change of 6.08% from $519.50 per metric tonne, while Gasoil recorded a change of 7.17%, moving to $484.88 per metric tonne from a previous of $452.45 per metric tonne.

Local Forex and Fuel Stock

Figures from the banking sector compiled by our Economic Desk of IES suggest the US Dollar strengthened

further against the Ghana Cedi, as the local currency depreciated marginally by 0.5% to close at Ghs4.41, from a previous average of GHS4.39.

The combined stock of Gasoline and Gasoil in the country has increased slightly from the previous quantity189 million litres.

PROJECTIONS FOR AUGUST 2017 FIRST PRICING-WINDOW

Taking into consideration the upward adjustments of Brent crude oil price as well as prices of finished products on the international market, the depreciation of the Ghana Cedi, stock levels in-country; the Institute for Energy Security (IES) projects fuel prices to go up again on the local market, unless the healthy competition for market share, and also the unfair price hikes in the last review drives OMCs to keep prices same as previous Pricing window.

Signed:
RICHMOND ROCKSON
Principal Research Analyst
(0244871916/0555990054)