Local fuel prices to drop further in second half of August 2016
The Institute for Energy Security (IES) is expecting petroleum prices, particularly petrol and diesel, in the country to drop marginally by between one and two per cent in the second pricing window of the month.
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The institute said its prediction is based on a number of factors including the high competition among the Oil Marketing Companies (OMCs), the drop in market price of both brent crude and refined oil. It also mentioned the appreciation of the Cedi against the U.S. dollar, and the increasing national fuel stock as part of the reasons.
Based on this, the release signed by the Principal Research Analyst of the institute, Mr Richmond Rockson, said the IES believes that there was enough positive momentum and fundamental justification to move the prices of petrol and diesel lower on the local market.
Local fuel market
It said during the first pricing-window for the month of August 2016, diesel and petrol prices on the local market recorded an average fall of 1.33 per cent and 1.28 per cent respectively; as aggressive competition among the OMCs, tied to massive draw-down of old stocks held by the Bulk Distribution Companies (BDCs) outweighed the low fuel stockpile in the country.
On the IES Top-10 Chart, Radiance Oil, Allied Oil, Goil, Frimps Oil, and Star Oil occupies the first five positions in terms of the cheapest Diesel prices on the local market.
For Petrol prices; Radiance Oil, Allied Oil, Goil, Puma Energy, and Glory comes first.
The market also recorded shortages of Liquefied Petroleum Gas (LPG) across the country, as predicted by the IES.
World petroleum market index
Over the period, price of Brent Crude rose by approximately 8.73 per cent as a result of falling U.S. refinery and production output, rumours of production cap by the Organization of Petroleum Exporting Countries (OPEC), and geopolitical risk in Nigeria, Venezuela, and Libya. However, in terms of average prices; the first Pricing-window for this month recorded a drop of 78 Cents over the previous.
Platts, the benchmark for refined petroleum products recorded a drop from $393.84metric tonnes to $369.50/metric tonnes, representing a change of 6.18 per cent for Diesel. In similar fashion, the average Platts price for Petrol on the world market dropped by $14.79/metric tonne representing 3.25 per cent.
Local market index and fuel stock
Data from the Bank of Ghana indicate that the Cedi held up against the U.S. Dollar over the period, recording a minimal appreciation of 0.09 per cent.
Over the first Pricing-window, the country’s stock for Diesel and Petrol combined increase from 407million litres to 479million litres; capable of meeting just above six and a half week of national fuel security, using June 2016 national fuel (Petrol and Diesel) consumption as basis.