The Executive Director of the Institute of Energy Security (IES), Paa Kwesi Anamoah Sakyi, has warned that fuel prices at the pump will continue to go up until the cedi stabilizes.
According to him, Bulk Oil Distributors who buy crude oil from the world market will have no option but to pass on the increasing cost of fuel to Ghanaians.
Speaking on the Citi Breakfast Show, Mr. Anamuah Sakyi said the increasing cost has little to do with taxes, but rather the stability of the cedi since more local currency is required to purchase the same amount of fuel due to the depreciation.
“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. In the last two weeks or more, the dollar was just around 4.7, but it has moved to 4.95; a depreciation of 4%.”
“It means importers of this product, being the BDCs will need more cedis this time to procure one dollar. They will be forced to pass on this other cost to the OMCs and the OMCs also transfer the same to us. The last window we bought petrol on the world market at $735 per metric ton, but now it is going for $747 per metric ton,” he added.
The Ghanaian cedi has been struggling to be at par with significant trading currencies especially the US dollar.
Currency analysts had said it might hit GHc5 to a dollar soon.
Fuel prices to hit 5 cedis per liter
The Institute of Energy Security had earlier predicted that prices of fuel might soon hit 5 cedis per liter for the second pricing window in September [September 16th to 30th].
Blaming the issue on the depreciation of the cedi, IES said other significant factors such as the increase in Brent crude have contributed to the increase.
According to the Institute of Energy Security (IES), the price of Brent crude on the world market went up by about 6 percent for the period under review.