Consumers of petroleum products might be paying slightly higher prices for the fuel they purchase at the country’s various pumps as we enter the month of June.
According to an analysis by the Institute of Energy Security (IES), the increase can be attributed to the 3.50% rise in price of Brent crude, together with the 1.05% increase in the price of gasoline, amongst other things.
A statement issued by the IES also noted that due to the market leadership role played by GOIL and a few others, and with the aim of increasing market share, some Oil Marketing Companies (OMCs) may, however, decide to maintain the current prices at the pump.
“With the 3.50% increase in price of the International Benchmark- Brent crude, together with the 1.05% increase in price of Gasoline, the 2.66% increase in Gasoil price, and the cedi depreciation of 0.35% against the US Dollar; IES predicts that OMCs in Ghana may increase fuel prices marginally at the pump due to these international market variables as we enter June 2021, particularly for those that maintained their prices at the pump from the first pricing-window of May through to the end of the second pricing-window,” the statement noted.
For the last pricing window in May, the national average price of a litre of fuel stood at GH₵5.78. Currently, the national average price of fuel per litre at the pump is pegged at Gh¢5.78 for both products.
Local Fuel Market Performance
For the pricing window under review, “Price of fuel on the local market remained stable within the period under review despite an expected marginal increase by the Oil Marketing Companies (OMCs) at the start of the pricing window. The current national average price of fuel per litre at the pump still remains pegged at Gh¢5.78 for both products,” the IES added.
World Oil Market
On the world market, the IES states that, the second pricing-window of May saw the international benchmark, Brent crude price average about $68.01 per barrel, representing a 3.50% increase from the previous window’s average price of $65.71 per barrel.
The Brent Crude price reacted to the usual volatilities in the market within this window. Prices of the benchmark briefly touched $70 per barrel on Tuesday 18th, May 2021 but slipped downward again on news of a breakthrough in the Iran Nuclear Deal between the US and Iran. This was later denied. The slip in prices continued till Thursday, 20th May 2021 on the announcement by the Iranian President that world powers had accepted to lift the sanctions on Iran.
The slump in prices represented a three-week low, largely in response to the geopolitical tensions in Iran’s relations with the world powers that continued in the nuclear talks. The EIA report of a 1.3 million-barrel rise in crude stocks within the same week also contributed to the falling prices.
Prices, however, corrected to the $68 per barrel mark after the Iran Nuclear talks failed to lead to the expected results, going past $69 per barrel at the end of the pricing window on Thursday, 27th May 2021.
Markets, however, remain bullish as demand recovery continues to shore up. The probable coming on stream of the Iranian supply, following the easing of sanctions by the US, limits some expectations but with the increased vaccinations in the US and Europe, traders remain positive for a rising demand in the coming weeks.