The Institute for Energy Security (IES) forecasts marginal price increases for gasoil, gasoline, and liquefied petroleum gas (LPG) in its second pricing window for May 2024, owing primarily to the weakened Ghana Cedi.
“Considering the developments in the foreign fuel market and the domestic forex market, the Institute for Energy Security (IES) anticipates an increase in fuel prices in the first half of June 2024, on account of the worsening performance of the Ghana Cedi.”
the massive fall (4.17%) of the Ghana Cedi against the U.S. Dollar may prevent a realization of the full gains made on the world fuel market on the local fuel market.
Local Fuel Market Performance
In the second pricing-window for May 2024, the loss in local currency’s value stalled expected price reductions at the domestic pump. On the specific performance of refined petroleum products monitored over the period, it was observed that Gasoil and Gasoline prices were relatively stable among most Oil Marketing Companies (OMCs) tracked over the period. However, Total Energies, Shell (Vivo), and Goil inched up their prices slightly, on account of the Cedi’s fall. Liquefied Petroleum Gas (LPG) sold at GH₡15.63 per kilogram (kg) in the closed window.
The Institute for Energy Security’s (IES’) calculation of national average price for the three (3) refined petroleum products for the second pricing-window for May 2024 show Gasoline and Gasoil selling at GH₡14.22 and GH₡14.00 per litre respectively, whereas (LPG) went for GH₡15.63 per kilogram (kg).
The IES Marketscan finds Zen Petroleum, Star Oil, and Benab Oil as OMCs selling at least-priced over the last two weeks.
World Oil Market
Throughout the third week of May 2024, Brent Crude oil prices remained within the $81.2 per barrel range, experiencing a steady decline. However, on May 24, 2024, the price increased by 1%, closing the week at $82.36 per barrel. This uptick was primarily driven by concerns that strong U.S. economic data would lead to prolonged high interest rates, thereby reducing fuel demand. Analysts predict that crude oil demand will begin to rise over the weekend, leading to the new trading period of June 2024. Brent Crude closed the second pricing-window at an average price of $82.67 per barrel, down from $83.45 per barrel; marking a 1.3% decrease.
World Fuel Market
The monitoring of the global Standard & Poor’s (S&P’s) Platts on petroleum products performance in the world fuel market shows that the prices of Gasoline, Gasoil, and LPG have all decreased. Published data for the second pricing-window of May 2024 indicate that Gasoline closed at $851.73 per metric tonne, Gasoil closed at $749.70 per metric tonne, and LPG closed at $444.80 per metric tonne. The net changes indicate that the price of Gasoline has fallen by 4.17%, Gasoil by 0.87%, and LPG by 3.44%.
Local Forex
IES Economic Desk’s tracking of local currency performance on the foreign exchange (forex) market for the first pricing-window for May 2024 show the local currency lost 4.17% in value against the U.S. Dollar. The Ghana Cedi traded at GH₡14.78 after previously trading at GH₡13.88 at the start of the second pricing-window for May 2024.
IES ESTIMATIONS FOR JUNE 2024 FIRST PRICING-WINDOW
Gasoline, Gasoil, and Liquefied Petroleum Gas (LPG) all recorded a decrease of about 4.17%, 0.87%, and 3.44%, respectively over the last two weeks. Given the favourable price changes recorded on the international market for these products, prices at the local pumps should ordinarily reflect a reduction to relieve consumers.
However, the massive fall (4.17%) of the Ghana Cedi against the U.S. Dollar may prevent a realisation of the full gains made on the world fuel market on the local fuel market.
Considering the developments in the foreign fuel market and the domestic forex market, the Institute for Energy Security (IES) anticipates an increase in fuel prices in the first half of June 2024, on account of the worsening performance of the Ghana Cedi.
