Petrol and diesel prices in Ghana will increase sharply from Wednesday, September 16, with diesel seeing the largest jump. The Chamber of Petroleum Consumers Ghana (COPEC) projected a 10.23 percent rise for diesel, pushing its average retail price to GHS 19.07 per litre. Petrol prices are expected to climb by 4.24 percent, reaching GHS 16.26 per litre.
These significant price adjustments are primarily due to a surge in international petroleum prices. Global crude oil prices rose from $89.30 to $103.07 per barrel during the recent pricing window. This substantial increase in the cost of crude oil directly impacts the prices of refined products like petrol and diesel at the pump. Consumers will feel the pinch of these higher costs in their daily commutes and business operations.
This impending fuel price hike adds to existing inflationary pressures within the Ghanaian economy. Fuel costs are a major component of the Consumer Price Index, influencing transport fares and the prices of goods and services. The cedi’s marginal appreciation of 0.29 percent against the US dollar, moving from GHS 11.5166 to GHS 11.4830, offered little relief against the rising international crude prices. Ghana remains heavily reliant on imported finished petroleum products, making its domestic fuel prices highly sensitive to global market fluctuations.
COPEC attributed the increases largely to higher international petroleum prices. The Free On Board (FOB) price of petrol rose by 10.08 percent to $1,251.07 per metric tonne. Diesel’s FOB price increased by 12.33 percent to $1,404.73 per metric tonne. Liquefied petroleum gas (LPG) also saw its international FOB price jump by 16.45 percent to $712.43 per metric tonne, leading to a projected domestic price of GHS 15.32 per kilogramme.
The immediate implication is increased cost of living and doing business across Ghana. Households will face higher transportation costs, potentially leading to reduced disposable income. Businesses, particularly those in logistics and manufacturing, will see their operational expenses rise. This could translate into higher prices for goods and services, further fueling inflation. Decision-makers will closely monitor the impact on economic stability and public sentiment.
COPEC has urged the government to extend its fuel subsidy intervention beyond the first pricing window of September. The chamber proposed a GHS 1 per litre relief on petrol and a continuation of the GHS 2 per litre relief on diesel. This intervention aims to cushion consumers until international prices stabilise. Such measures would require significant fiscal commitment from the government, potentially impacting other budgetary allocations.
The consumer advocacy group also called for an acceleration of expansion works at the state-owned Tema Oil Refinery (TOR). Increased domestic refining capacity would help reduce Ghana’s reliance on imported finished petroleum products. COPEC suggested expanding TOR’s capacity from its current 45,000 barrels per day to 100,000 barrels per day. This strategic move could offer long-term stability against global price volatility.
Furthermore, COPEC appealed to oil marketing companies to absorb part of their profit margins. This absorption would help cushion consumers against the projected price increases. Such a move would require collaboration between the government and private sector players. The varying pump prices, with petrol expected to sell between GHS 15.44 and GHS 17.08 per litre and diesel between GHS 18.12 and GHS 20.02, highlight the competitive landscape among marketers.
The government’s response to these calls for intervention will be crucial in managing the economic fallout. Any decision on subsidies or refinery expansion will have significant budgetary implications. The ongoing volatility in global oil markets underscores the need for sustainable long-term solutions to Ghana’s energy security. Consumers and businesses will be watching closely for policy announcements in the coming days.