The Institute of Energy Security (IES), an energy think tank, has projected a continues increase in fuel prices at the pump until the cedi stabilizes.
Blaming the fuel increase on the depreciation of the cedi, they argue that, since Bulk Distributors Companies (BDCs) buy crude oil from the world market, they would have no option but to transfer the cost to the Oil Marketing Companies (OMCs) which will in turn be passed on to Ghanaians at the pumps.
Current checks indicate that previously, the BDCs were selling crude oil to OMCs at GH¢3.10 per litre but currently retailing at GH¢3.24― translating to a 4.5% increase.
For petrol, the BDCs were previously selling to the OMCs for GH¢2.29 but currently offering to the OMCs at GH¢3.12 which is a 5.7 percentage point increase.
To correct this pitfall, the IES has called on government to scrap the petroleum tax in order to stabilise prices at the local pumps.
Speaking on Accra based TV3, Research Analyst, Mikdad Mohammed said it was important that government takes a strong decision on the future of special petroleum tax in the price build up.
“We think that it is important that if government is committed to making sure that people are comfortable and cushioned in this period, the government should be able to take a bold step because the factors which precipitated the introduction of the special petroleum tax are no applicable,” he said.
Meanwhile, the Chamber of Petroleum Consumers Ghana (COPEC) is calling for “an immediate national dialogue” where all stakeholder involved will meet and decided on fuel prices.
“If we want to stabilise prices for Ghanaians, we must move from this regime where we allow the importers to speculate their own cedi exchange to the dollar,” COPEC’s executive secretary, Duncan Amoah has said.
With the current performance of the Cedi, Mr. Amoah proposes that, the Bank of Ghana have a fixed dollar to cedi ratio which would be maintained for fuel prices whether or not the Cedi depreciates.
“When there is a change, or the dollar is stronger than the cedis, then it means that you need more cedis to source for your products,” but if the BoG can strike a deal with importers that for the next three months, the Cedis to dollar ratio for oil prices would be at GH¢4.98 whether the cedi goes up or not, then the country can make some progress, Mr. Amoah explained.
By: Grace Ablewor Sogbey/ firstname.lastname@example.org