Petroleum Prices To Go Up By 14%

The energy sector is likely to witness its first major shock in decades with petroleum products prices projected to increase by 14 percent by the end of this week, Joy Business has gathered.

Sources say the geometric increase has been necessitated by the continuous hike in crude oil prices on the international market due to the current tropical storms in the United States oil-rich state, Texas.

Known for its pine forest and oil reserves in the southern US, Texas has been buffeted by Hurricane Harvey which has affected its key cities such as Houston and Corpus Christi.

Joy Business sources say the unfathomable amount of rainwater dropped on the two cities has caused the shut down of more than 10 refineries, which produce more than three million barrels of crude a day.

The development has affected orders that should have been heading to some sub-Saharan African (SSA) countries like Ghana, resulting in the return of some petroleum products to the US to shore up demand in that country.

Sources also say the current summer conditions in Europe have doubled the demand for petrol, further impacting the price of crude currently trading at $54 a tonne.

The cumulative effect of the two factors is likely to cause price hikes in petroleum products in Ghana.

Per calculations, a gallon of diesel now selling at ¢18.58 pesewas could go to a little over ¢20, while a gallon of petrol which goes for over ¢18 might go up to ¢21.15 pesewas.

But consumers in Ghana can heave a sigh of relief because of the current policy which gives the power to the over 90 Oil Marketing Companies to set their own prices.

Sources say it is unlikely all the OMCs will increase their prices by the margin, adding the price hike will be for a moment until high demand for crude wanes when winter comes.