The Institute of Energy Security (IES) has projected a two-to-four percent reduction of fuel prices on the local market in November 2018.
The reduction according to the Institute is as a results of the 5.94 per cent fall in Brent crude average prices, fall in finished prices on the international market, and the Cedi recording respectable gains against the dollar within the window.
This was contained in a statement signed and issued on Wednesday, by Mikdad Mohammed, a research and policy analyst at the Institute.
He said the substantial fall in the price of LPG on the international fuel market is expected to lead the crusade on the local market.
“The IES expects some OMCs to be influenced by the Price Deregulation policy to effect reductions beyond the projected margin,” He stressed.
Below is the full statement on the review of October second pricing window.
Local Fuel Market Performance
The window under review saw prices of Gasoline and Gasoil go up as the Institute projected. Average prices of
Gasoline and Gasoil which was GH¢5.070 per litre increased by GHp 0.14 to sell at ¢5.21. Current national average prices of both Gasoline and Gasoil at the pump is GH¢5.190 and GH¢5.20 respectively. Relative to other Oil Marketing Companies (OMCs), IES Market-scan shows Fraga, Benab, Frimps Oil, Zen Petroleum, Lucky Oil, and Alinco Oil, sell the least-priced fuel on the market.
World Oil Market
While U.S. sanctions on Iran are expected to tighten supplies, Saudi Arabia has signalled its willingness to increase supply further if needed, as the full tightening of sanctions against Iran by the United States takes full shape in November amidst fears of escalating trading rows. As a result, within the window, average Brent crude price has fallen from $83.96 per barrel to $78.97 per barrel. On prices of finished products based on Standard and Poor’s Platts Benchmark, Gasoline and Gasoil prices have also reduced by 5.85% and 2.57% respectively.
Gasoil which was previously selling for $733.14 per metric ton is now trading at $714.30 per metric ton.
Gasoline is also trading at a reduced price of $694.75 per metric ton, up from its previous price of $737.93 per metric ton.
Fuel Stock and Local Forex
Within the window two state oil companies, the Tema Oil Refinery (TOR) and the Bulk Oil Storage and
Transportation Company (BOST) procured 947,977 barrels of crude (equivalent to 128,798 metric tons) and 39,000 metric tons of Gasoil respectively. Overall, the country received approximately 11,000 metric tons of LPG, 10,500 metric tons of Gasoline; 56,000 metric tons of Gasoil, and 16,000 metric tons of HFO.
The cedi is beginning to make some gains against the US Dollar within the window as IES economic Desk computed figures show the cedi appreciated by 2.64%. The cedi which sold at GH¢4.91 two weeks ago at the last window is currently selling at GH¢4.78.
IES PROJECTION FOR NOVEMBER 2018 FIRST PRICING-WINDOW
The Institute has taken cognizance of the 5.94% fall in Brent crude average prices and also fall in finished prices on the international market, with the Cedi recording respectable gains against the dollar within the window. On this basis, the Institute for Energy Security (IES) foresees fuel prices on the local market falling within the band of 2% and 4%.
The substantial fall in the price of LPG on the international fuel market is expected to lead the crusade on the local market. The IES expects some OMCs to be influenced by the Price Deregulation policy to effect reductions beyond the projected margin.
Signed: MIKDAD MOHAMMED
Research and Policy Analyst, IES
By: Emmanuel Yeboah Britwum