June Pricing Window: Fuel Prices to go up again- IES

The Institute for Energy Security, IES is projecting a ‘substantial’ increase in fuel prices at the pump for the first pricing window of June 2018, if the National Petroleum Authority fails to intervene through the Price Stabilization and Recovery Levy.

The IES during the last pricing window of May 2018 projected an increment of 2-3%, which took effect, with petrol and diesel selling at 4.670 per litre and 4.660 per litre respectively.

The IES is now projecting that consumers of petroleum products should expect another increment of some 3 percent.

In a statement released by IES signed by its Research Analyst, Mikdad Mohammed, the IES says:

“Within the period under review, IES Economic desk data collected suggests that the Ghana Cedi depreciated against the U.S. Dollar, from a previous trading average of Ghs 4.56 to close the window at Ghs 4.62, representing a drop of 1.32 percent.”

“Over the last 14days, total crude import amounts to 75,000 barrels and 60,300 metric tonnes of finished products. For breakdown; Gasoline – 30,400 metric tonnes, Gasoil – 6,600 metric tonnes, and LPG – 8,300 metric tonnes.” The statement added.

The IES said “aside the prices of crude, and petroleum products recording increases on the international fuel market, the premium charged on these products is rising every passing window. This is further worsened by the local currency’s depreciation within the past months, and remaining a major concern for importers as the consequences are negative and likely to impact on prices at the pump. “The Institute for Energy Security (IES) guided by the indicators that drive fuel prices, projects prices at the pump to rise substantially if the NPA does not step in to salvage the situation.

See Full Statement

REVIEW OF MAY 2018 SECOND PRICING-WINDOW

Local Fuel Market Performance

The second Pricing-window of May 2018 recorded upward adjustment in fuel prices at the pump as projected by IES after the recent stability emanating from National Petroleum Authority’s (NPA’s) interventions. The increment was largely driven by the rise in Brent crude price, rise in the price of finished products on the international fuel market, and the depreciation of the Cedi. The NPA’s previous interventions with the Price Stabilization and Recovery Levy (PSRL) was missing in the Pricing-window under review. On the average, national prices went up by 2.38%, with Gasoline and Gasoil currently selling at Ghs 4.660 and Ghs 4.650 respectively on average terms.

IES Market-Scan shows that Zen Petroleum continue to lead the market with the cheapest Gasoline and Gasoil, followed by Benab Oil, Pacific, Lucky Oil and Frimps Oil.

World Oil Market Prices

Brent crude price has been tumbling slowly as news of Saudi Arabia and Russia considering an increase in production hit markets, driving fears that the OPEC production cut deal may soon come to an end. Brent crude is trading today at $76.02 per barrel, averaging $78.77 per barrel within the past window; a change of 4.86% compared to the previous average of $75.12 per barrel.

In Standard and Poor’s Global Platts analysis, Gasoline prices went up by 3.17% to close trading at $712.68 per metric tonne, from a previous average of 735.25$ per metric tonne. While Gasoil moved up by 4.24%, closing at $656.68 per metric tonne $684.50 per metric tonne.

Local Forex and Fuel Stock

Within the period under review, IES Economic desk data collected suggests that the Ghana Cedi depreciated against the U.S. Dollar, from a previous trading average of Ghs 4.56 to close the window at Ghs 4.62, representing a drop of 1.32 percent.

Over the last 14days, total crude import amounts to 75,000 barrels and 60,300 metric tonnes of finished products. For breakdown; Gasoline – 30,400 metric tonnes, Gasoil – 6,600 metric tonnes, and LPG – 8,300 metric tonnes.

PROJECTIONS FOR JUNE 2018 FIRST PRICING-WINDOW

Aside the prices of crude, and petroleum products recording increases on the international fuel market, the premium charged on these products is rising every passing window. This is further worsened by the local currency’s depreciation within the past months, and remaining a major concern for importers as the consequences are negative and likely to impact on prices at the pump.

The Institute for Energy Security (IES) guided by the indicators that drive fuel prices, projects prices at the pump to rise substantially if the NPA does not step in to salvage the situation.

Signed: MIKDAD MOHAMMED

Research Analyst, IES

Source: MyNewsGh.com




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