The Institute for Energy Security has reviewed the local fuel pricing for the month of may so far and predicts further fall of prices of the commodity.
In a press statement, the Institute for Energy Security seeks to explain in detail how this fall in local fuel price can affect the economy.
Below is the full statement
REVIEW OF MAY FIRST PRICING-WINDOW
Local Fuel Market Performance
The local fuel prices recorded an average drop of 1.03% on Gasoline and Gasoil combined, during the first 15-days of
the month of May 2017. Shell, Total, Goil, Puma, Lucky Oil, Allied Oil and Frimps Oil were among the few Oil
Marketing Companies (OMCs) to effect price drops at the pump over the past weekend due to competition for market
IES MarketScan indicates that the average price per litre for Gasoline and Gasoil is Ghs3.94 and Ghs3.90, and that
Frimps Oil and Puma Energy are selling the cheapest fuel on the local market.
World Oil Market Prices Indices
Benchmark Brent crude prices have been falling virtually every day for the past 15-days, pushing average Brent crude
price from $52.97 per barrel to $50.17 per barrel. OPEC’s production cuts agreed in December 2016 which had pushed
oil prices up earlier in the year was not sufficient to keep oil prices high. Today U.S. oil production is increasing again,
boosting supply and keeping prices in check.
The international Gasoline and Gasoil prices published by Platts on Friday 12th May 2017 were $510.28 per metric
tonne and $432.60 per metric tonne respectively; suggesting a 7.99 percent drop for both fuels. These reductions were
influenced by the rise in global stock of Gasoline and gasoil.
Local Forex and Fuel Stock
The Ghana Cedi recorded a slim drop against the U.S. Dollar by closing at Ghs4.22 from the opening of Ghs4.18, for
the period under discussion.
Stock of fuel held in-tank at the close of the first Pricing-window indicates a sharp drop when compared to the previous
window. Gasoline declined from 126 million litres to 98 million litres, while Gasoil stock fell to 174 million litres from
an opening stock of 217 million litres.
PROJECTIONS FOR MAY 2017 SECOND PRICING-WINDOW
With crude oil price falling by over 5%, Gasoline and Gasoil prices dropping by approximately 8%, fuel stocks capable
of meeting over 4-weeks of national demand, and the Ghana cedi remaining fairly stable against the U.S. Dollar;
consumers can expect to get a break at the fuel pump.
The Institute for Energy Security (IES) can expect Oil Marketing Companies to reduce their prices further in the second
Pricing-window, after Goil, Shell, Total and a few others kick-started the reductions over the weekend.
Principal Research Analyst, Petroleum Unit – IES