The Institute for Energy Security (IES), an energy research organization, has predicted that the cedi’s further depreciation will destroy consumers’ prospects of lower gasoline pump costs following a drop in international prices.
The international price declines for gasoline and diesel, 10.96% and 0.54%, respectively, could result in lower local pump prices during the second pricing window in September 2022.
Any prospects of decreased pump prices, with the exception of gasoline, were dashed when the local currency depreciated significantly by 3.58 percent from its previous rate of GH 9.75 to its current rate of GH 10.10 to the US dollar.
According to its predictions for this month’s second pricing window, “IES forecasts a minor reduction in the present price of gasoline at local pumps due to the large decline in value of the local currency versus the US dollar.”
While diesel and LPG prices also decreased on the global market, IES warned that the 3.58 percent devaluation of the cedi may prevent any anticipated decrease in the cost of the two products at local gas stations.
It said consumers may rather be forced to buy diesel and LPG at a higher value over the current prices for the rest of September 2022, on account of the cedi’s fall against the American greenback.
The International Energy Agency stated this week that the expansion in global oil consumption will grind to a halt in the fourth quarter. However, many local analysts believe that if the local currency keeps declining, this will have minimal effect on Ghanaians.
Crude oil has dropped substantially after a surge close to its all-time highs in March when Russia’s invasion of Ukraine added to supply concerns, pressured by the prospects of recession and weaker demand.
However, due to the cedi’s ongoing depreciation—it has already lost more than 30 per cent of its value this year—all of these estimates have had little effect on domestic fuel users.
Local fuel market performance
In the just-ended pricing window, fuel sold at all Oil Marketing Companies (OMCs) monitored by the IES went up by roughly 3 percent for petrol and 7 percent for diesel on average terms.
The national average price per litre of petrol stands at GH¢11.30 – up from GH¢10.95 in the last window and representing a 3.19 percent increase. Diesel national average price per litre stands at GH¢14.45 from a previous average of GH¢13.42, representing a 7.6 percent increase.
This is despite the fact the International Brent Benchmark saw a 2.77 percent price reduction over the previous pricing window’s average price of US$96.72 per barrel – to the current average price of US$94.04 per barrel.
