The second pricing window period spans from Tuesday, January 16, 2018 till the end of the month.

According to the Institute of Energy Security (IES), the development can be attributed to the increase in crude oil prices, performance of the cedi, among other key pointers.

This will be the first time prices will go up since the reduction in the price stabilization levy for Liquefied Petroleum Gas (LPG) and diesel was announced by the National Petroleum Authority (NPA) in December last year (2017).

The price stabilization levy component for the two products has since been reduced from 10 to 3 pesewas.

This means the total tax component on a litre of diesel has dropped from 1 cedi 16 pesewas to 1 cedi 8 pesewas.

Also, the tax component on a litre of LPG has declined from 54 pesewas to 46 pesewas.

But the Principal Research Analyst at the IES Richmond Rockson tells Citi Business News the increase is expected looking at the current trend in fuel prices on the international market.

“Crude prices have gone up by about six percent. Finished products also went up about six percent. Our cedi has also depreciated and in the last window over the period we were supposed to have a number of increment which has not been done by the OMCs so most of them are complaining that they have already incurred losses. So in this particular window, we foresee that most of them are going to try to chip into margins to be able to make up for it otherwise they will still be making losses” he said.

Most Oil Marketing Companies for the1^st pricing window in January kept their prices unchanged.

This development was largely attributed to the relative stability on the international market.

However, if prices go up by 3 percent, it means a litre each of petrol and diesel could be sold to you at 4 cedis 62 pesewas at the pumps of major OMCs.

On the other hand, be prepared to pay about 4 cedis 71 pesewas at the pumps of some major OMCs if prices are increased by 5 percent.

Richmond Rockson says consumers are likely to pay more at the pumps for the second pricing window with the increase in petroleum prices on the international market.

“Consumers definitely are going to pay more in the next window unless the NPA or OMC’s do something; otherwise, consumers must definitely brace themselves to pay more” he added.

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By: Jessica Ayorkor Aryee/citibusinessnews.com/Ghana

The post Fuel prices to increase between 3% and 5% appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to the Chief Executive Officer of the National Petroleum Authority (NPA), Hassan Tampuli, the price surge could largely be attributed to the recent hurricanes that ravaged the United States of America.

“For the past many years, at this time of the year, prices will normally come down after the summer driving season. In the summer driving season, where there is no winter, people go out of their houses, they go on vacation, crisscrossing their country and then the demand on products increases…it is different this time because of the unfortunate national disaster that we have in the United States, especially, which has led to the diversion of [fuel] products from Europe meant for south, west and central African countries to the Americans,” Mr. Tampuli said on Wednesday at a press conference.

Fuel prices hit all-year-high

[contextly_sidebar id=”poGDKqqKi4t0uMj1m9QGAHEnH0oPmPJQ”]Fuel prices have hit all-year-high in September, with petrol selling at an average price of GHc4.29 at the pumps, and diesel going for an average of GHc4.23 per litre.

Analysts have posited that the surge in fuel prices could be among other things be as a result of crude oil price on the international market, as well as the depreciation of the Ghanaian currency – the cedi.

Reduce taxes on fuel prices

Some have also complained that the numerous taxes on petroleum products, could have led to a surge in prices, and have thus called on government to review them.

But Mr. Tampuli defended the taxes saying they help to stabilize the prices within the country. He also said government does not benefit from the taxes saying they are in the interest of consumers.

Hurricane Harvey, Irma and all in-between

Climate change in recent times led to some massive hurricanes – Harvey, Irma, others —hitting some states in the US.

The storms, which were so violent, were said to have destroyed properties worth millions of dollars. Some US states were cut off from social amenities including electricity due to the storms.

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By: Godwin Akweiteh Allotey/citifmonline.com/Ghana
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The post US hurricanes caused fuel price hikes in Ghana – NPA appeared first on Citi 97.3 FM - Relevant Radio. Always.

Currently, data from the National Petroleum Authority shows that there are about 10 different kinds of taxes and levies on petroleum products.

Speaking on the Citi Breakfast show, a principal research analyst at IES, Richmond Rockson, argued that the adverse effect of the increment in fuel prices on consumers could be minimal if government scraps some of the taxes.

[contextly_sidebar id=”KakJOmtQ4k59VJ0ZF7r4i7EY8UqIstNb”]“The first thing that should go is the special petroleum tax. I don’t think that there is any need for government to impose 15 percent there. There is no point in that. Some of them can also be reviewed; I don’t see why the road fund should be 40 pesewas, it’s too much. The price stabilization and recovery levy must also go, especially when government is passing the cost on to consumers. There is no point keeping that in there as well,” he added.

Current figures from some fuel stations show that, prices of petrol and diesel have hit an all-year high, with petrol selling at an average of GHc4.29 at the pumps, and diesel going for an average of GHc4.23 per litre.

Mr. Rockson attributed the increment on the surge in crude prices on the international market as well as the depreciation of the Ghanaian currency – the cedi.

“When it comes to fuel pricing we know that there are a number of indicators that we all look at – one of the critical things that we look out for is our cedi, thus the exchange rate as compared to the dollar. Over the period, the cedi has been depreciating marginally and from May till date – ten consecutive windows—it’s only one [window] that we had a stable currency. In all the other nine, the cedi depreciated and we’ve been mentioning this every time. As we speak, the average exchange rate is 4.48 pesewes from a previous average of 4.44 pesewes, and this is really troubling because the effect it has on fuel pricing is that, it’s going to push prices up instead of pushing it down.”

He said “crude oil prices have also surged” adding that “as we speak, we are doing about 55 dollars from a previous average of 52 dollars per barrel, a depreciation of about 3%.”

“For a benchmark for finished products for gasoline and gas oil, they’ve also gone up, in this particular window they went up by 14% for gasoline and for gas oil it went up by 8%. This is what has accounted for the increment in this month [September],” Mr. Rockson explained.

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By: Godwin Akweiteh Allotey/citifmonline.com/Ghana
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The post Scrap taxes on fuel to reduce prices – Energy Institute appeared first on Citi 97.3 FM - Relevant Radio. Always.

Current figures from the petroleum industry show that, prices of the two products at the various fuel stations have hit all time high, with petrol selling at an average of GHc4.29 at the pumps, and diesel going for an average of GHc4.23 per litre, as at the third week of September 2017.

The Institute of Energy Security (IES) had earlier predicted a 7% increase in fuel prices.

The increase has been attributed to the marginal depreciation of the cedi, as well as increased global crude oil prices due to the recent floods in the US which affected production at major oil companies.

The Principal Research Analyst at the Institute of Energy Security, Richmond Rockson, said “We are expecting prices to rise between seven and ten percent and this will have an impact on consumers.”

“This probably will be the most significant. The cedi also keeps depreciating. After the storm Harvey, refineries were affected so prices will definitely go up,” he added.

Petrol and diesel are the most patronized fuel products in Ghana, and any increase usually affects transport fares and impacts cost of general goods.

Sharp dip

Prior to the sharp surge in the price of fuel in September, data from the National Petroleum Authority (NPA), showed that petrol and diesel only increased marginally between February and March, but dropped significantly between April and July until it gained momentum in August 2017.

Below is an infographic of the price change in petrol and diesel since January:

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By: Godwin A. Allotey & Melvin M. Clottey/citifmonline.com/Ghana
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The post Fuel prices hit all-year-high [Infographic] appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to IES, per their analysis, diesel and petrol are likely to go down by 1.5% and 3.0% respectively on the local market.

“As a result of marginal loss of the Ghana Cedi to the U.S. Dollar, the up to 8.12 % reduction in the prices of finished products on the world market, the 8.10% drop in crude oil price, and the low stock of Diesel in the country; the Institute for Energy Security (IES) can project prices of Diesel and Petrol on the local market to drop between 1.5 and 3.0% for the second Pricing-window for the month of November 2016,” a statement from the Institute stated.

[contextly_sidebar id=”5K8VExi0kbROKsEktJKtDqcy38jK3dqC”]The statement signed by Richmond Rockson, Principal Research Analyst, Petroleum unit at IES observed that over the last two weeks, the average Brent crude price dipped from $51.22/barrel to 47.07, a reduction of 8.10%.

“Today the average Platt prices for Petrol and Diesel is $481.08/metric tonne and $418.81/metric tonne indicating a drop of 7.36% and 8.12% on the two fuels, as compared to $519.32/metric tonne and $454.98/metric tonne recorded last two weeks.”

Fuel prices up by 11%

The Chamber of Petroleum Consumers (COPEC) of Ghana in October announced that fuel prices had gone up by 11%, but the National Petroleum Authority said it was instead 4%.

The Chief Executive Officer of the NPA, Moses Asaga, described the announcement as false, and said it should be disregarded since fuel prices had gone up only by 4 percent.

“What we are correcting is that; the 11percent increase in fuel price is false, and that that is not the situation, the increase has been between 3 and 4 percent,” Mr Asaga added.

Below is the full statement from IES:

LOCAL FUEL PRICES TO FALL BETWEEN 1.5 AND 3.0 PERCENT

REVIEW: FIRST PRICING-WINDOW FOR NOVEMBER 2016

Local Fuel Market

Trading activities within first Pricing-window for the month of November 2016 saw most Oil Marketing Companies losing their market share to Goil, Top Oil, Radiance Oil, Glory Oil and Allied Oil as these OMCs were selling the cheapest fuel on the local market. Shell (Vivo Energy), Total Petroleum Ltd, and Engen Petroleum reduced their prices marginally to compete for market share. Today, an average pump price for Petrol and Diesel is Ghs 3.666 per litre and Ghs 3.663 per litre respectively, indicating an average price drop of about 1.8%. The global gasoline (Petrol) supply glut as against huge supply-gap for Gasoil (Diesel) saw diesel prices at most pump stations being sold as the same price as Petrol and some instance higher than Petrol.

World Petroleum Market Indices

Over the last two weeks, the average Brent crude price dipped from $51.22/barrel to 47.07, a reduction of 8.10% following reports from Energy Information Administration (EIA) and International Energy Agency (IEA)suggesting that the global inventories continue to exceed demand; coupled with Russia and OPEC member countries not making good their word to freeze production.

Today the average Platt prices for Petrol and Diesel is $481.08/metric tonne and $418.81/metric tonne indicating a drop of 7.36% and 8.12% on the two fuels, as compared to $519.32/metric tonne and $454.98/metric tonne recorded last two weeks.

Local Market Index and Inventory

From data obtained from Bank of Ghana, the Ghana Cedi lost marginally against the U.S. Dollar over the first Pricing-window by 0.03% and it is expected to see a further depreciation (marginal though) as the Ghanaian general elections draws closer.

Combined stock of Petrol and Diesel held in-tank and on vessels offshore dropped from 445 million litres to 318 million litres, capable of ensuring 3-weeks supply of Diesel and 7-weeks supply of Petrol to meet national demand.

Today, Petrol and Diesel stock in-tank and offshore stands at 195 million litres and 123 million litres respectively.

PROJECTIONS FOR NOVEMBER 2016 FIRST PRICING-WINDOW

As a result of marginal loss of the Ghana Cedi to the U.S. Dollar, the up to 8.12 % reduction in the prices of finished products on the world market, the 8.10% drop in crude oil price, and the low stock of Diesel in the country; the Institute for Energy Security (IES) can project prices of Diesel and Petrol on the local market to drop between 1.5 and 3.0% for the second Pricing-window for the month of November 2016.

Signed: RICHMOND ROCKSON

Principal Research Analyst, Petroleum Unit – IES

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By: Godwin A. Allotey/citifmonline.com/Ghana

The post Fuel prices likely to go down soon – Energy Institute appeared first on Citi 97.3 FM - Relevant Radio. Always.