IES says Cedi depreciation will drive up fuel prices
The continuous decline of the Cedi’s value against the US Dollars will lead to a marginal rise in prices of petrol and diesel at the pumps this week, the Institutute for Energy Secuirty has projected.
The Institute said the decline in prices of petroleum products on the international market would not reflect in prices locally as a result of the Cedi’s depreciation.
In its assessment of the August 2022 First Pricing Window, the IES found that the Ghana Cedi depreciated by 5.40 per cent from the previous rate of GHS8.35 to the current rate of GHS8.83 to the US Dollar in the last two weeks.
In an interview with the Ghana News Agency, Mr Fritz Moses, Research Analyst, IES, said fuel prices would go up by not more than three per cent in the next pricing window – August 16 to August 31, 2022.
“But for the Cedi depreciation, prices of petrol and diesel would have reduced by about five per cent,” he said.
The national average price per litre of petrol stands at GHS 10.58 down from GHS11.30 in the last window, representing a 6.37 per cent reduction.
Diesel’s national average price per litre stands at GHS13.28 from a previous average of GHS13.65, representing a 2.71 per cent reduction.
The IES found that Brent Crude fell by 2.80 per cent over the previous pricing window’s average price to a current average price of $98.38 per barrel.
Petrol price on the international market fell by 8.48 per cent, from its initial price of $1103.75 per metric tonne to the end date price of $1010.75 per metric tonne while diesel price also fell by 7.26 per cent to settle at $1032.00 per metric tonne.
In the just-ended window, LPG’s prices on the international market also reduced to 5.86 per cent, lower than its earlier window price of $659.00 per metric tonne to an end date price of $620.38 per metric tonne, the IES said.
“Despite the 8.48 per cent fall in the price of Gasoline, 5.86 per cent fall in the price of LPG, and the 7.26 per cent fall in Gasoil price, the IES projects that prices of fuel on the local market may see marginally price increase at the pumps.
“The steep depreciation of the Ghana Cedi against the US Dollar may wipe away the gains from the international fuel market. On the back of the fall in the value of the Cedi, Ghanaians may either have to buy fuel at a much higher price or contend with the current pump prices in the coming days,” the Institute said.