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Expect another transport fare hikes as fuel prices are on the ascendancy

Adnan Adams Mohammed

Chamber of Petroleum Consumers Ghana (COPEC) are predicting further price hikes on petroleum products at the pumps by about 12 percent in the next pricing window of June 2022, as commercial transport operators have scheduled a meeting to consider fare increment.

COPEC situated that, the 12% expected hike would translate to average price increase of about GH¢1.33 per litre. While petrol prices are projected to go up by GH¢1.24/litre which is an 11.41% increase, the price of diesel may increase by GH¢1.43/litre depicting a 12.93% increase.

This is expected to affect the business of commercial transport operators as fuel is one of their main raw materials. Already, transport fares have been increased more 40 percent in this year with the latest 20% increment in last month.

“Current Crude prices are at $124.96/barrel, resulting in processed Petroleum Products of $1,451.25/MT of petrol and $1,289.97/MT for diesel, coupled with further depreciation of the exchange rate of $1:GH¢8.0483 and the government’s applicable tax rebate of 15 pesewas per litre still in place till the end of June 2022”, COPEC press statement released last week explained.

Mr Richard Yaw Amankwah, Deputy General Secretary in Charge of Operations at GPRTU in an interview last week noted that, commercial drivers “have not seen any significant increase” in income and, thus, must shore up their fares to make up for loss revenue stemming from the consistent increase in fuel prices.

“It is not our doing”, Mr Amankwah said, explaining: “The situation demands it”.

“We are also consumers”, he noted.

“Whenever fuel prices go up, it affects our business and even though we are not happy to increase transport fares, it will go against our business if we don’t do so,” he said.

However, Head of Research at COPEC, Benjamin Nsiah has recommended that “Tema Oil Refinery must be retooled, recapitalised and equipped with efficient managers to make the entity start operations and be profitable. We also must diversify our imports within the short and medium-term. This means we need to begin to explore other countries, refineries and traders that will give us cheaper products compared to what we are getting now from the European and Arab areas”.

“The Ministry of Trade, finance and the Bank of Ghana need to implement a coordinated plan to help the cedi appreciate against the dollar. When these three measures are put together within the shortest possible time, we believe the price of fuel will reduce soon,” he added.

Even though petrol and diesel are expected to go up, the narrative might be different for LPG as it’s expected to experience a marginal decrease in price, the statement added.

“LPG is also likely to sell around GH¢10.024/kg showing a reduction of about 27 P/kg (-2.66%) over the previous window.”

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