Executive Director of the Centre for Environmental Management and Sustainable Energy (CEMSE), Benjamin Nsiah, is warning that fuel prices could surge towards GH¢17 per litre in the second pricing window of March.
The warning comes as the National Petroleum Authority (NPA) revises the price floors upward for petroleum products ahead of the new pricing window, which takes effect from March 16.
Speaking to Citi Business News, Benjamin Nsiah indicated that the latest adjustment in the petroleum price floors ranks among the steepest increases recorded in recent months and could translate into higher ex-pump prices across the country.
According to him, petrol could sell between GH¢12.50 and GH¢13.50 per litre depending on the pricing decisions of Oil Marketing Companies. Diesel is also expected to trade within the range of GH¢14.99 to GH¢15.92 per litre.
However, he cautioned that pump prices could exceed GH¢16 and surge towards GH¢17 per litre if Bulk Distribution Companies increase their premiums on imported petroleum products amid heightened geopolitical risks affecting global supply chains.
“With respect to petrol, I think projections are that we are looking at between GHȼ12.50 and GHȼ13.50 pesewas depending on OMCs.
“With respect to diesel, we are looking between GHȼ14.99 per liter to GHȼ15.92 per liter. These are the ranges we are looking at. However, if the BDCs decide to increase their premiums, as we do some of these projections, we use a premium of $150 per metric.
“So if the BDCs decide to increase based on these geopolitical tensions, increasing the risk of getting the products to the local market, they decide to increase their premiums to $200 or $250 per metric, it means that the product price will exceed GHȼ16, surging towards GHȼ17 per liter beginning Monday,” Benjamin Nsiah stated.
The National Petroleum Authority has set new minimum price floors for petrol, diesel and liquefied petroleum gas for the second pricing window of March, reflecting movements in global oil prices and the cedi-dollar exchange rate.
Under the revised structure, the price floor for petrol has increased to GH¢11.57 per litre from GH¢10.46 per litre recorded in the first pricing window of March.
Diesel’s minimum price has risen sharply to GH¢14.35 per litre from GH¢11.42 per litre, while the price floor for liquefied petroleum gas has increased to GH¢10.67 per kilogramme from GH¢9.38 per kilogramme.
This represents increases of GH¢1.11 for petrol, GH¢2.93 for diesel and GH¢1.29 for LPG within the same month.
The price floors set by the NPA represent the minimum allowable selling prices under Ghana’s petroleum pricing framework.
However, they do not reflect the final pump prices paid by consumers as several cost components remain outside the price floor computation.
These include premiums charged by international oil trading companies, operating margins for Bulk Import, Distribution and Export Companies, as well as margins set by Oil Marketing Companies and dealers, which are added before final retail pump prices are determined.
The upward adjustment also comes as global crude oil prices experience renewed volatility driven by geopolitical tensions in the Middle East, a development analysts say could further exert pressure on domestic fuel prices in the coming weeks.
Consumers could therefore face additional pressure at the pumps as the revised petroleum pricing guidelines take effect, effectively removing the ability of Oil Marketing Companies and LPG Marketing Companies to offer fuel price discounts.
Attention is now shifting to how major downstream players such as GOIL and Star Oil will respond when the new pricing window takes effect, particularly as competition intensifies in Ghana’s downstream petroleum market.
