Petroleum prices forecasters’ conflict each other

Petroleum hedging

Latest forecast of prices of petroleum products by the country’s two most prominent petroleum price forecasters, Chamber of Petroleum Consumers Ghana (COPEC GH) and Institute for Energy Security (IES) seems to be conflicting each other.

This has left the general public confused and unresolved in their planning for the next pricing window.

The Institute for Energy Security, has indicated that fuel prices will rise further as the local currency (Cedi) continuously weakens against the US Dollar and other foreign currencies.

The Principal Research Analyst of IES, Richmond Rockson therefore advised passengers, drivers and users of petroleum products to get ready to pay more for fuel they consumed.

He explained that, “this is as a result of steady depreciation of the Ghana Cedi causes the price of petrol and diesel at various filling stations to increase.”

However, the Chamber of Petroleum Consumers Ghana (COPEC GH) has forecasted that “prices across most pumps are likely to remain stable with no expected increases on current pump prices” in the first pricing window in September which commences on Friday, September 1.

COPEC in its report related that, the second window of the current month of August saw averagely, 3% upward adjustments in pump prices due largely to rising world market prices and foreign exchange differences.

This was contained in a statement issued by COPEC GH Executive Secretary, Duncan Amoah, on Wednesday, August 30 indicating that current pump prices of PMS (petrol ) and AGO (diesel) after closing trading across most Oil Marketing Companies (OMCS) in August averaged GHS18.40 and GHS 18.31 respectively.

COPEC GH explained that the stable prices expected in September is due to world market prices over the past two weeks, which has seen some decline in respect of AGO, the old specs of 1000ppm diesel saw a decline of about 11 dollars per metric to close trading at $461.750/metric whiles the new 10ppm sulphur spec also saw $11.3 decline to close trading at $479.250/metric.

“The drop in prices of the two specs translates to averages of negative 3 pesewas per litre on current pump prices of diesel,” COPEC GH explained.

PMS or petrol saw a marginal increase of about $2.64 to close trading at $572.50/metric, this represents 1 pesewa impact on current pump prices but it’s likely to be contained between the Bulk Distribution Companies (BDCs and the OMCs.)

COPEC GH said: “Forex over the past two weeks period has remained fairly stable to close trading at ghc4.51/ $1 from the previous ghc4.445/ $1 or a difference of GHS 0.061/$1 though this is subject to availability of forex to the importer”.

Forex is therefore expected not to have any serious impact on fuel prices for the coming window.

In a serious contradiction to COPEC’s forecast report, IES in its report stated that, in the last 3 weeks, motorists say they receive lesser fuel for the same amount. Some motorists have questioned the increments especially because crude oil prices on the world market have remained stable.

But researchers say if the Cedi remains weak, the consumer will continue to bear the brunt of higher fuel prices.

“You take the cedi, you take finished product, you take the crude oil and there are percentages to it so if the cedi is depreciating, it has an effect and what happens is that even though the prices are stabilizing once the cedi depreciates, it erases any benefit that we could have had on the international market; that is the challenge we are having now and we are calling on government to pay close attention to the cedi because for six conservative windows the cedi continues to depreciate and that is worrying”

-Adnan Adams Mohammed

Send your news stories to and via WhatsApp on +233 244244807 Follow News Ghana on Google News