Fuel prices to go up by 3 percent—COPEC

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The Chamber of Petroleum Consumers Ghana (COPEC) is forecasting a 3 percent increase in fuel prices at the pumps for the first week of January 2022.

According to COPEC, the increase will lead to a 20 pesewas surge in the prices of petrol and diesel in the country.

A statement from the chamber said “On the National Petroleum Authority’s (NPA) website we have realized that from the benchmark prices NPA is using to project the prices for the first window of January, local ex pump prices will increase by 3 percent. In nominal terms, we are expecting prices to surge by 20 pesewas per liter across the board.” Head of Research at COPEC, Benjamin Nsiah stated.

He however explained that “some OMCs may not utilize all their margins and if they don’t we are expecting maybe a 15 pesewas increase at the pump beginning 1-16th January 2022.”

Full statement below:

EX-PUMP PRICES OF FUEL TO SURGE IN THE 1ST WINDOW OF JANUARY (1ST TO 16th JANUARY, 2022)

Brent crude plunged by 10.7% to $73.45/barrel on the 26th November 2021 and the OPEC Reference Basket (OPB) plunged by 6.9% to $76.09/barrel on the same date. The OPB further tumbled to $70.07/barrel on 2nd December 2021. The plummeting crude oil prices were due to the new Omicron Variant new COVID-19 Omicron (B.1.1.529) variant which restricted mobility in some countries, and the expectation of gradual increment of oil production by the Organisation of Petroleum Exporting Countries (OPEC) +.

However, Brent crude futures settled up $1.56, or 2.1%, at $76.85 a barrel, the highest close since Nov. 26, and a gain of 4.5% on the week as of 23rd December 2021. Additionally, the U.S. West Texas Intermediate (WTI) crude futures ended up $1.03, or 1.4%, at $73.79 a barrel, to rise 4.1% on the week as at 23rd December 2021. The surge in crude oil prices is due to Libyan supply disruptions cutting the supply of about 300,000 b/d and the lower anxiety towards the new Omicron variant because of the perception that the variant is containable than previously feared.

In Ghana, the National Petroleum Authority (NPA) indicated that the benchmark price for petrol/MT for setting the ex-pump price of petrol in the 1st Window of January 2022 is $707.95/MT. Again, the Benchmark price for diesel/MT for setting the ex-pump price in the same widow is $641.38/MT. The NPA set the Ghana Cedi at Ghc6.4040 against a dollar.

Findings

Using the conversion factor of 1324.4 for petrol from a metric tonne to litres, 1183.43 for diesel from a metric tonne to litres and a maximum total marketer’s margin and dealer’s margin of Ghc0.75 based on the flexibility of OMC margins, as well as a forward rate of Ghc6.4040 to a dollar, the ex-pump prices for petrol is expected to surge by 3.7% and diesel is expected to surge by 2.5%. Averagely ex-pump prices are expected to surge by 3.1% in the 1st Window of January, 2022 from 1st to 16th January.

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