The Institute for Energy Security (IES), an energy think tank in the Republic of Ghana has predicted a marginal rise in prices of petroleum products in the early part of 2020.
However, IES believes the rise could be averted if the West African nation’s downstream petroleum regulator, NPA, applies the price stabilisation recovery levy.
“Taking into consideration the 4.07% increment in prices of Crock oil as well 4.5996 and 5.05% increment in the prices of Gasoil and Gasoline on the international market respectively; the Institute for Energy Security (IES) foresees prices of fuel on the local market potentially increasing marginally despite the cedi recording some marginal gains against the dollar within the period.
“However, the increases could be averted or its impacts minimized if the National Petroleum Authority (NPA) applies the Price Stabilization and Recovery Levy, (PSRL),” a statement by IES said.
Local Fuel Market Performance
Prices of petroleum products remained largely stable as predicted by the Institute for Energy Security (IES) in the Pricing-window under review. Fuel prices within the second Pricing-window of December 2019 saw majority of the Oil Marketing Companies (OMCs) maintaining the prices of Gasoline and Gasoil unchanged. The current national average price of fuel per litre at the pump is pegged at GH¢5.36 for both Gasoline and Gasoil.
For the Pricing-window under review, Zen Petroleum, Benab Oil, Pacific, SO Energy and Alinco Oil sold the least-priced Gasoline and Gasoil on the local market relative to others in the industry, according to IES Market-scan.
World Oil Market
Crude oil prices continue to remain above the $60-dollar margin for this window as an Analyst Poll by the Wall Street Journal suggested prices will remain relatively stable at current levels at least during the first quarter of the New Year despite OPEC’s deeper production cuts. The overall sentiment on oil prices seems to be leaning towards the bearish. On Average, Brent crude rose marginally from $62.87 per barrel to close at $65.43 per barrel; thus recording an increased change of 4.07%
According to Standard and Poor’s Global Platts benchmark for fuels, Average Gasoline Price increased by 5.05% to close at $620.11 per metric tonne, from a previous average of $590.32 per metric tonne; while Gasoil increased by 4.59% to close trading at $607.34 per metric tonne from a previous $580.70 per metric tonne.
Local Forex
Data collated by IES Economic Desk from the Foreign Exchange market show the Cedi made some very marginal gains against the US Dollar within the period, after showing weakness in the previous window. The Cedi traded at an average price of Ghs5.65 to the US Dollar over the period under review, from a rate of Ghs5.71 recorded in the second window of December 2019. The rate of appreciation recorded against the US Dollar is 1.05%.
PROJECTIONS FOR JANUARY 2020 FIRST PRICING-WINDOW
Taking into consideration the 4.07% increment in prices of Crude oil as well 4.59% and 5.05% increment in the prices of Gasoil and Gasoline on the international market respectively; the Institute for Energy Security (IES) foresees prices of fuel on the local market potentially increasing marginally despite the cedi recording some marginal gains against the dollar within the period. However the increases could be averted or its impacts minimized if the National Petroleum Authority (NPA) applies the Price Stabilization and Recovery Levy (PSRL).