News Guide Africa

Tag: fuel prices

  • Falling global oil risks open critical policy space for Central Bank’s disinflation agenda – Dr Asiama

    Falling global oil risks open critical policy space for Central Bank’s disinflation agenda – Dr Asiama

    By Adnan Adams Mohammed

    The Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, has indicated that the recent de-escalation of geopolitical risks in the Middle East could significantly strengthen Ghana’s domestic disinflation path, potentially clearing the way for a more accommodative monetary policy stance.

     

    Speaking directly to heads of commercial banks in Accra, Dr. Asiama revealed that a pending diplomatic framework agreement between Iran and the United States has fundamentally altered the central bank’s short-term macroeconomic projections.

    The international de-escalation has significantly reduced risk premiums embedded in energy markets, opening up a vital window of opportunity for the central bank to lock in structural price stability.

    Altering the Inflation Outlook

    The central bank’s optimistic assessment follows a period of acute anxiety within the Monetary Policy Committee (MPC). At its last statutory sitting, where the policy rate was held steady at 14 percent, the committee had flagged prolonged external supply chain disruptions as a primary threat to consumer price stability, despite the relative resilience of domestic output.

    However, the unexpected cooling of international shipping bottlenecks particularly surrounding the vital Strait of Hormuz has altered the risk matrix.

    “When the Committee last met, it assessed the domestic economy as resilient despite a complex and volatile global environment,” Governor Asiama stated during the high-level meeting. “The Committee noted that although inflationary pressures remained contained, potential risks persisted, especially those associated with prolonged geopolitical tensions. Clearly, the outlook since yesterday has now changed, and we are monitoring events in the coming days and weeks until the next meeting of the MPC.”

     

    Easing the Imported Inflation Pass-Through

    For an economy heavily reliant on imported refined petroleum, the global oil correction has immediate, far-reaching benefits for the central bank’s inflation-targeting framework. High fuel prices have historically acted as a rapid pass-through catalyst into the domestic economy, driving up transport fares, manufacturing overheads, and food distribution costs.

    Central bank analysts note that sustained crude prices below the $80 a barrel mark will help choke off this imported inflation at the source. By lowering the cost of energy inputs, the cooling external environment provides a direct tailwind to the ongoing disinflation process, making it significantly easier for the BoG to anchor long-term inflation expectations.

    Moreover, the central bank’s ability to maximize these global gains is reinforced by its aggressive reserve-building strategy. Having built a dense international reserve cushion, the BoG is well-positioned to maintain exchange rate stability. When a stabilizing cedi is paired with falling international commodity prices, the combined effect drastically reduces the cost of imported goods, accelerating the drop in headline inflation.

    Creating Policy Space for Rate Cuts

    The primary structural benefit of this disinflation momentum is the financial flexibility it grants to monetary authorities. If current trends hold and consumer price metrics continue to drop, the central bank will have the necessary justification to ease its tight monetary stance, potentially lowering the 14 percent policy rate during upcoming MPC cycles.

    A reduction in the central bank’s benchmark rate would trigger a corresponding drop in commercial banking lending rates, which have historically stunted private sector growth. Business associations have long argued that high borrowing costs restrict industrial expansion and squeeze corporate liquidity.

    While Governor Asiama stopped short of signaling an immediate, definitive policy pivot, his remarks strongly suggest that the changing external risk profile has laid the groundwork for a more supportive economic environment. If global energy lines remain free of conflict, the central bank’s disinflation agenda could soon transition from a defensive inflation-containment strategy into an active catalyst for cheaper commercial credit and nationwide business growth.

     

  • Petrol and LPG Price Floors Rise While Diesel Eases Slightly

    Petrol and LPG Price Floors Rise While Diesel Eases Slightly

    Consumers and commercial transport operators across the country are facing a highly fragmented pricing landscape for the upcoming first pricing window of June.

    According to the latest data and mandatory regulatory updates, the baseline price floors for premium motor spirit (petrol) and Liquefied Petroleum Gas (LPG) are set to tick upward, while automotive gasoil (diesel) consumers will receive minor, short-term relief at the pumps.

    The mixed adjustments reflect the ongoing volatility of finished petroleum products on the international market, combined with shifting local import dynamics under the National Petroleum Authority’s (NPA) price risk management frameworks.

    Global market variables driving the local divergence

    The contrasting pricing movements highlight the complex link between international refined product benchmarks and Ghana’s deregulated downstream procurement structures. Over the past month, global gasoline refining margins and tight supply clusters have driven international petrol costs upward. Concurrently, international diesel inventories have stabilized due to slowing industrial demand across Europe, leading to a marginal easing of bulk import delivery prices.

    Addressing the media on the upcoming adjustments, an energy analyst at the Chamber of Petroleum Consumers (COPEC) noted that while the slight decline in diesel prices is welcome news for industrial logistics and mass transit, the rising costs of petrol and LPG will directly pinch domestic households.

    “What we are witnessing is a clear reflection of localized international product trends,” the COPEC representative explained. “Diesel is easing slightly due to cooling global demand, which will offer some breathing room to heavy transport fleets and haulage operators. However, the upward trajectory for petrol and LPG means that the average commuter and domestic gas consumer will continue to shoulder heavy financial burdens at the retail end.”

    Bulk Distribution Companies navigate regulatory floors

    Under current downstream guidelines, the National Petroleum Authority sets mandatory price floors for every pricing window to prevent predatory pricing, ensure fair competition, and guarantee that Bulk Distribution Companies (BDCs) can recover their core landing and infrastructural costs.

    Speaking on condition of anonymity, an executive director at a prominent downstream oil marketing firm observed that while price floors protect structural stability, they leave Oil Marketing Companies (OMCs) with very little room to offer deeper discounts to consumers.

    “The rising price floors for petrol and LPG mean that no matter how aggressive our internal efficiency drives are, we cannot drop our retail rates below the government-set minimums,” the downstream executive stated. “Our margins are already incredibly compressed. While we welcome the minor relief on diesel, the structural reality is that landing costs for petrol remain stubborn, and the incoming floor updates will force an adjustment at our service stations to maintain commercial viability.”

    Transport unions and consumer groups demand long-term fixes

    The persistence of high retail fuel costs continues to drive broader socio-economic anxieties, given fuel’s role as a primary driver of headline inflation and public transport operating costs. Representatives from the major commercial transport unions have already signaled that while the marginal diesel drop prevents an immediate rise in transport fares, the parallel surge in petrol rates will impact smaller, urban commercial operators who rely heavily on gasoline-powered engines.

    “Any upward movement in petrol affects thousands of urban transport operators who run smaller buses and delivery services,” a regional coordinator for the transport unions remarked. “We are watching the market closely. We urge the government to continuously review the existing tax components on petroleum products so that when international market variables surge, the local consumer is insulated from extreme, unmanageable spikes.”

    With the National Petroleum Authority expected to publish the finalized retail matrices last weekend, OMCs were already recalibrating their digital pump displays to comply with the new statutory baseline floors, leaving the public to brace for a highly bifurcated spending outlook at the pumps.

     

     

     

     

     

     

     

  • Transport Unions Hail Massive GH₵9/gallon Diesel Price Cut; Urge Further Action on Spare Parts

    Transport Unions Hail Massive GH₵9/gallon Diesel Price Cut; Urge Further Action on Spare Parts

    By Humu Shaibu

    The Commercial Transport Operators of Ghana have officially lauded the government following a dramatic reduction in fuel prices, specifically a GH₵9.00 per litre drop for diesel, describing the move as a “lifeline” for the industry.

    In a statement released on Wednesday, April 15, 2026, the coalition expressed profound gratitude to President John Mahama, Minister for Transport Joseph Bukari Nikpe, and the National Petroleum Authority’s (NPA) Lawyer Edudzi Tamakloe. The group credited the trio’s “decisive intervention” for providing much-needed relief amid a period of extreme operational strain.

    A Timely Intervention

    Before this latest pricing window, transport owners warned that the rising cost of fuel, combined with the soaring prices of spare parts and maintenance, was threatening to collapse the sector.

    “This reduction could not have come at a better time,” the statement noted. “The cost of running a commercial vehicle had become nearly unbearable, with the ripple effects felt by every ordinary Ghanaian commuter.”

    The operators emphasized that the GH₵9.00 reduction is a direct result of the government’s willingness to engage stakeholders and implement deliberate policies to shield the local economy from global market volatility.

    Commitment to Fare Stability

    As the primary link between the economy and the public, the operators pledged that the benefits of the fuel price slash would be passed on to the citizenry.

    “We can confirm that this reduction will go a long way to stabilize transport fares and ease the burden on households,” the leadership stated, promising to maintain affordable services in light of the government’s gesture.

    The ‘Oliver Twist’ Appeal

    Despite the celebratory tone, the transport unions were quick to remind the government that fuel is only one piece of the economic puzzle. Invoking the spirit of Oliver Twist, the group presented a four-point petition for sustained relief:

    Price Sustainability: A request for the government to maintain the downward trend through constant monitoring of deregulation benchmarks.

    Quarterly Engagements: The institutionalization of formal meetings between unions and the government to review the impact of fuel prices on fares.

    Spare Parts Support: An appeal for tax waivers or import subsidies on essential vehicle components to further lower operational costs.

    Road Infrastructure: An urgent call to accelerate the maintenance of major commercial routes to reduce the frequent “wear and tear” that currently drains operators’ profits.

    Leadership Commended

    The unions concluded by reiterating their support for the current administration’s “people-centered” approach. By specifically naming Edudzi Tamakloe of the NPA and Minister Nikpe, the operators signaled a high level of satisfaction with the current regulatory oversight of the petroleum sector.

    “When government listens and acts, the people benefit,” the statement concluded.

     

     

     

  • Relief at the Pumps: Gov’t slashes fuel prices to cushion consumers

    Relief at the Pumps: Gov’t slashes fuel prices to cushion consumers

    By Adnan Adams Mohammed

    In a significant move to protect citizens from the volatile global oil market, the Government has announced a strategic fiscal intervention to lower fuel prices across the country. Starting Thursday, April 16, 2026, the State will absorb GH¢2.00 per litre on diesel and GH¢0.36 per litre on petrol.

    The temporary relief measure, sanctioned by Cabinet and announced by the Presidency on Wednesday, arrives as a lifeline for households, transport operators, and businesses currently grappling with a sharp rise in the cost of living.

    A Shield Against Global Shocks

    The intervention is a direct response to recent surges in international petroleum prices, fueled by geopolitical tensions specifically the fallout from the Israel-US conflict with Iran and the subsequent closure of the Strait of Hormuz. These external factors had pushed crude oil prices as high as $102 per barrel, leading to steep increases at local pumps over the last two pricing windows.

    In a statement signed by the Minister for Government Communications, Felix Kwakye Ofosu, the government noted that the spikes were becoming unsustainable for the domestic economy.

    “This intervention is intended to cushion customers and ease the cost burden on households and transport operators. Government remains committed to maintaining price stability and protecting livelihoods in the face of external shocks,” the statement read.

    Key Details of the Intervention

    ● Effective Date: April 16, 2026 (Beginning of the new pricing window).

    ● Duration: One month (subject to review).

    ● Diesel Subsidy: GH¢2.00 per litre reduction.

    ● Petrol Subsidy: GH¢0.36 per litre reduction.

    Economic Outlook and Monitoring

    While the National Petroleum Authority (NPA) had already signaled a marginal drop in price floors for the upcoming window, this government-led absorption provides a much deeper cut than market forces alone would have allowed.

    The Ministry of Finance and the Ministry of Energy and Green Transition have been tasked with monitoring the global trajectory closely over the next 30 days. According to the Presidency, this period will be used to evaluate whether further “recalibrations” are necessary to sustain the nation’s economic recovery.

    For now, the move has been widely welcomed by commercial drivers and industry players who had feared another round of fare hikes. By absorbing these costs, the government aims to keep transport fares stable and prevent a “knock-on” effect on food inflation.

     

     

  • Experts clash over Ghana’s fuel price strategy

    Experts clash over Ghana’s fuel price strategy

    By Baraka Amidu

    As Ghanaians grapple with the stifling cost of living, the debate over fuel prices has reached a fever pitch.

    While recent international market trends suggest a downward shift, industry experts and economists are warning citizens not to expect a sudden windfall at the pumps, sparking a heated debate over government intervention and timing.

    The “gradual” reality

    The Chief Executive Officer of the Chamber of Petroleum Consumers (COPEC), Duncan Amoah, has cautioned the public against expecting “instant relief.” Despite a marginal drop in global crude prices and a relatively stable Cedi, Mr. Amoah noted that the mechanisms governing local pricing mean that consumers will only see a slow, incremental reduction.

    “The relief will be gradual,” the COPEC boss warned. He explained that because Bulk Oil Distributing Companies (BDCs) often carry stocks purchased at previous higher rates, the price at the pump cannot reset overnight. This “lag effect” means that while global prices may tumble, the Ghanaian consumer remains tethered to older, more expensive inventory for a period.

    Timing and government delay

    While a reduction is on the horizon, COPEC has also hit out at the government’s handling of the crisis. Mr. Amoah described recent hints of government-led relief as a “right move but wrong timing,” questioning why the state waited until the economy was at a breaking point to consider mitigating measures.

    Critics argue that the delay in implementing price stabilization measures has already caused irreparable damage to small businesses and transport operators. The sentiment from industry players suggests that the government’s reactive, rather than proactive, stance has left the market vulnerable to shocks.

    Ghana’s standing in Africa

    The urgency of the situation is underscored by recent data ranking fuel prices across the continent. Ghana currently places 15th in Africa for the most expensive fuel. While this puts the country ahead of several neighbors in terms of “affordability” on paper, the ranking provides little comfort to locals whose purchasing power has been eroded by record-high inflation.

    The ranking highlights a stark reality: despite being an oil-producing nation, Ghana remains highly susceptible to global volatility and domestic taxation, keeping it in the upper tier of expensive energy markets in the region.

    The great subsidy debate: “Protect people, not prices”

    Amidst calls for the government to scrap fuel taxes or reintroduce subsidies, prominent economist and Director of Operations at Dalex Finance, Joe Jackson, has offered a dissenting—and controversial—view.

    Mr. Jackson has flatly rejected the idea of fuel tax cuts or subsidies, arguing that such moves are fiscally irresponsible and often benefit the wealthy more than the poor. “Protect people, not prices,” Jackson urged, suggesting that the government should instead focus on direct social interventions for the vulnerable rather than “bleeding” the national treasury to artificially lower the price of petrol.

    According to Jackson, subsidies are a “lazy” fix that the country cannot afford given its current debt crisis. He maintains that keeping taxes intact is necessary for state revenue, provided that revenue is used to cushion the poorest citizens through targeted social programs.

    As the next pricing window approaches, the atmosphere remains tense. For the average commuter and trader, the academic debate over “lag effects” and “fiscal responsibility” matters less than the daily cost of a gallon of diesel.

    For now, the message from both the industry and the analysts is clear: the road to lower fuel prices will be long, and the government’s refusal to cut taxes means that the “relief” Ghanaians are praying for may be more of a trickle than a flood.

     

     

  • Iran-US/Israel War: Ghana authorities allay fear of hard-hit spillovers

    Iran-US/Israel War: Ghana authorities allay fear of hard-hit spillovers

    By Adnan Adams Mohammed

    The recent escalation in the Middle East specifically the joint US-Israeli airstrikes on Iran on February 28, 2026 and Iran’s subsequent retaliatory strikes has created significant ripples across the globe.

    For Ghana and the wider African continent, the impact is not just a distant news story; it is a direct threat to economic stability and human security.

    Despite the global chaos, Ghanaian authorities are attempting to project a sense of calm.

    The Bank of Ghana has assured the public that Ghana’s “macroeconomic buffers” (foreign reserves and fiscal adjustments) are stronger than in previous years and can act as a cushion against these external shocks.

    With regards to Consular Support, emergency hotlines have been activated for Ghanaians in the Middle East to register for potential evacuation.

    Analyzing other impact on Ghana and the region, there could be immediate future threats and risks which need policymakers and governments attention for proactive decisions.

    Economic Impact: The “Oil Shock” and Inflation

    Africa is highly sensitive to fluctuations in the Middle East because of its reliance on global energy markets and shipping lanes.

    Fuel Prices: The Strait of Hormuz, a chokepoint for 20% of the world’s oil, is now a “no-go” zone. For Ghana, which is a net importer of refined petroleum, this means a “landing cost” surge. Expect higher prices at the pumps, which traditionally leads to increased transport fares and utility costs.

    Inflationary Pressure: Ghana had recently seen gains in taming inflation. However, experts like Prof. William Brafu-Insaidoo have warned that these gains are now under threat. When fuel goes up, food prices follow (due to haulage costs), potentially triggering a new cost-of-living crisis.

    The “Double-Edged Sword” for Producers: While oil-producing nations like Nigeria, Angola, and Libya might see a temporary boost in export revenue due to high crude prices, this is often offset by the high cost of importing refined petrol and the global economic slowdown that reduces overall demand.

    Human Security and the Diaspora

    The conflict has put thousands of African migrants and students in the line of fire.

    Evacuation Crisis: On March 1, 2026, Ghana, Kenya, Nigeria, and Uganda began scrambling to evacuate citizens from the region. Ghana has already begun withdrawing non-essential staff from its embassy in Tehran.

    Travel Advisories: The Ghanaian Ministry of Foreign Affairs has issued an urgent “avoid non-essential travel” warning. With airspace closures in the Middle East, many Ghanaians working in the Gulf States (Qatar, UAE, Bahrain) are at risk of being stranded.

    Geopolitical and Security Risks

    The war is causing a realignment of priorities that could leave Africa vulnerable.

    Security Vacuum: As the US and its allies pivot their military resources and “strategic focus” toward the Middle East (Operation “Epic Fury”), there is a fear of a security vacuum in West Africa and the Sahel. This could embolden jihadist groups to expand their territory while international attention is elsewhere.

    Diplomatic Pressure: African nations, through the African Union (AU), are under pressure to take sides. AU Chairperson Mahmoud Ali Youssouf has called for “restraint,” but the conflict is deepening geopolitical fractures on the continent between those aligned with Western interests and those sympathetic to the “Global South” or Iranian-aligned blocs.

     

     

     

     

  • Stakeholders agree to scrap failed Gold-For -Oil initiative

     

    “Gold-for-Oil policy scrapped; stakeholders push for a better solution.”

    Adnan Adams Mohammed

    Stakeholders in the downstream petroleum sector have resolved to abandon the controversial Gold-For-Oil programme on the basis that it has not fulfilled its objectives. The Energy Minister, has therefore confirmed that the current administration would discontinue the Gold-for-Oil programme and replace it with a better system.

    Ghana’s gold-for-oil policy, marketed as a daring move to stabilize the cedi, now finds itself ensnared in execution flaws, questionable efficacy, and mounting political discord. As its true impact remains cloudy, the policy may soon join the long list of bold yet faltering attempts to tame exchange rate volatility of Ghana’s turbulent currency.

    “There’s a high level of opacity, and the clarity is not there,” John Jinapor said in an interview last week. He referenced the Auditor-General’s report, which had flagged issues with theprogramme, reinforcing claims that it lacked accountability and efficiency. “If it were that clear and transparent, we wouldn’t need the reforms we are pursuing,” he added.

    Instructively the International Monetary Fund had earlier expressed reservations over the initiative, making the Bank of Ghana to retreat from its original role in its implementation.

    Consequent to such widespread reservations, the Chief Executive of the Association of Oil Marketing Companies (AOMCs) and LPG Marketing Companies, Dr. RiversonOppong, expressed disappointment with the much- touted Gold-for-Oil (G4O) programme. Dr. Oppong argued that the initiative did not meet its intended objectives and disrupted the industry’s supply chain.

     

    “In the long run, we have seen how this was introduced, and the fact is, it absolutely didn’t curb energy pricing in any way,” Dr. Oppong stated.

    He noted that towards the end of 2024, Ghana experienced fuel shortages because Bulk Oil Distribution Companies (BDCs) struggled to plan their imports alongside the Gold-for-Oil supply. “As a result, BDCs were reluctant to import fuel, which led to supply challenges,” he explained.

    Dr. Oppong further questioned whether the programme had fulfilled its primary goal of reducing fuel prices, stating emphatically, “The answer is a big no.”

    He emphasized that industry players were waiting for the government to outline a new framework to replace the existing policy.

    “With dialogue, I believe we can come up with a better solution,” he added.

    Meanwhile, the energy minister has pleaded for time to phase out the programme. “You need time to put a workable system in place. In the interim, we are making adjustments to reduce losses and enhance transparency, but ultimately, we will replace it,” he stated.

    The government’s decision to phase out Gold-for-Oil is expected to pave the way for a new fuel pricing policy, with industry players advocating for a more predictable and transparent framework

     

    Ho water crisis to end.. as GWCL promises new

    pumps

     

    The Managing Director of the Ghana Water Company Limited (GWCL), Mutawakilu Adams, has assured residents of Ho and its surrounding communities that steps are being taken to resolve their ongoing water crisis.

    According to Adams, the company has ordered two new machines to replace the old and faulty ones at the Kpeveheadworks, which has suffered multiple breakdowns in recent weeks, disrupting water supply across the municipality.

    The frequent failure of the Kpeve headworks pumps in January has led to a severe water shortage, forcing residents to travel long distances in search of water. Hospitals, schools, and other institutions have also been severely affected by the crisis.

    Volta Regional Minister James Gunu, along with GWCL management and traditional leaders from Ho and Kpeve, toured the Kpeve headworks to assess the situation, last week.

    Speaking to the media after the inspection, MutawakiluAdams reaffirmed the company’s commitment to resolving the issue. “We have placed orders for two brand-new machines to replace the faulty ones, ensuring a more effective and reliable water supply,” he assured.

    Residents remain hopeful that the arrival of the new equipment will bring lasting relief and end the recurring water shortages in the region

     

  • Fuel prices to surge further as BDCs to sell at going exchange rate

    Fuel prices to surge further as BDCs to sell at going exchange rate

    Adnan Adams Mohammed

    Consumers of fuel product are advised to fill or buy any quantity of fuel they can safely store as prices are to surge further, according energy analyst.  

    The analyst asserted that, Bulk Oil Distribution Companies (BDCs) are now supplying petroleum products to the various Oil Marketing Companies (OMCs), operators of fuel stations, at the exchange rates higher than the current market exchange rate of the U.S dollar.

    According to information gathered from the BDCs,  they have recorded losses since early September when they sold the products to OMCs at the then prevailing exchange rate of averagely GHC9.0 to US$1.0 in the price build up.

    Now, in November, they need to change those Cedis they received using the 8, 9, 10 Cedis exchange rate  in the price build up in September into dollars at current price of GHC14. “You’ve locked in these products at a certain rate, and after you’ve sold the product and you’re going to buy forex, it has started going a certain trajectory,” he said.

    “Many BDCs are in this dilemma except maybe Allied BDC which is well managed and has his own OMC. So they are now selling a liter of fuel at GHC18-19, as at last week Thursday, October 3, to recoup some of the losses they made”, Alex K. Mould, former CEO of National Petroleum Authority told Economy Times in an interview last week.

    “Like I said most of the BDC‘s have made losses in September and October because of the 120 day credit given to them by their suppliers (the likes of Trafi, Glencore, Vitol and BP).  

    “They sold the products early September and are still holding the Cedis they got using  GHC8, 9, 10 exchange rate used in the price build up at that time. Now they need to change those Cedis they received using 8, 9, 10 Cedis exchange rate  in the price build up into dollars at current price of GHC14 to 15.

    “So they have made losses (using the mark-to-market rate) although still, unrealized, because they haven’t changed the Cedi into dollars.

    The situation has been confirmed by the Chief Executive Officer of the Ghana Chamber of Bulk Oil Distributors, Dr. Patrick Kwaku Ofori in a speparate interview last week.

    He indicated that, Bulk Oil Distributors are currently bleeding due to the harsh economic conditions they have to operate in.

    “You’ve locked in these products at a certain rate, by the time after you’ve sold the product and you’re going to buy forex, it has started going a certain trajectory,” he said.

    Dr Ofori noted that, the prevailing economic situation has led to some distributors taking a break from the business to wait out the storm in order not to accrue any more losses.

    Those who continue to trade, he said, are really having a terrible time and are most likely being driven to continue trading in order to make up for the huge losses they have accrued in earlier trades.

    He noted that the rapid depreciating of the cedi against the dollar has cost many distributors millions of dollars in losses; this he says has been exacerbated by the fluctuating price of fuel on the international market, currently on a steady rise.

    “So that notwithstanding, about the volumes of products that you’ve brought in-country that I was talking about and then also maturing LCs that you quickly need to cash in on. So most of the members in order to keep their credit lines open and then also to keep their banks happy needed to even give super abnormal discount on products knowing clearly that they were even going to make some losses”, he said.

    “One of our major players has a dollar obligations of a minimum  23 million dollars a week, whilst the Bank of Ghana gives us 120million dollars a month. And I’m talking about just one player. So you look at the challenges that they go through.”

  • Fuel price spikes: NPA to remove taxes to manage prices

    Fuel price spikes: NPA to remove taxes to manage prices

    Adnan Adams Mohammed

    As consumers of petroleum products keep calling on government to intervene to help tame or reduce the rate of increase in prices, the National Petroleum Authority (NPA) has assured of a possible solution.

    The Authority indicates that, discussions are ongoing with the Ministries of Finance and Energy to find a manageable solution to the persistent rise in fuel prices.

    Within the past few weeks, prices of fuel at the pumps have consistently rise to hit an all-time high of about GHC8.30 per litre as at last week. Consumers have attributed the spikes to exchange rate escalation and too many taxes. But, NPA believes the discussions with the ministries will focus largely on the possible removal of some taxes on petroleum products.

    “We are also concerned, there are a lot of discussions we are having with the Ministry of Energy, and we are seeing if together with the Ministry of Finance, we will make some proposals,” Head of Pricing at the NPA, Abass Ibrahim Tasunti has said.

    Fuel prices at some fuel stations have crossed the GH¢8 per litre mark in the first week of March 2022 with predictions that the commodity will sell at GH¢9.00 per litre by close of the month.

    But Abass Ibrahim Tasunti maintains that the situation can be blamed largely on current happenings on the global oil economy; thus, the government will play a role in cushioning citizens.

    “For us, we don’t make the fiscal and economic policies for government on how we regulate the fuel industry because the pricing is done according to world formula. If you look at the taxes in the formula, they are approved by Parliament. So, if any of them are to be removed, it has to go back to Parliament.”

    In the meantime, the Minority in Parliament is demanding the immediate scrapping of taxes in the petroleum price build-up that have outlived their purpose.

    It argues that those taxes constitute about 40% of the price build-up on the products.

    Making a strong case for its removal, the minority said such a move would drastically reduce the price of fuel and subsequently relieve Ghanaians who have endured high prices of the products.

    “At the time the price of crude in the world was around US$30 we had a problem with the FPSO Kwame Nkrumah crude, so production came down.”

    “That is why the Special Petroleum Tax was introduced to help us rake in some revenue. In the 2016 budget, we had introduced sub-clauses that by 2017 this tax should be off and the reason is that by then, we would have sorted the issues with the FPSO Kwame Nkrumah”, Member of Parliament’s Mines and Energy Committee, Edward Bawah said.

    The Institute for Energy Security (IES) is also predicting a four percent increase in the prices of Liquefied Petroleum Gas (LPG), Diesel, and Petrol at the pumps in the first pricing window of March.

    A barrel of Brent Crude Oil which was going for about $66 a year ago, and $78 at the start of 2022, jumped 7.3% to $103.9 a barrel in February.

  • Lorry fares adjusted 15% upwards amidst global petroleum price hikes 

    Lorry fares adjusted 15% upwards amidst global petroleum price hikes 

    Adnan Adams  Mohammed

    From  last week Saturday, February 26, 2022, commercial road transport operators in the country  have increased transport fares by 15 percent.

    The fare adjustment comes after months of agitation by the commercial drivers calling on the government to intervene to reduce prices of fuel at the pumps but could not get any results as prices rather kept on rising week by week. Also the fare increase is justifiable as current Russia-Ukraine war has triggered oil prices to jump on fears that the crisis will disrupt supply chains across the world.

    As at last week, futures of Brent crude, the international benchmark, reached a seven-year high of almost $98 (£72) after Russia recognised breakaway rebel regions in Ukraine’s east as independent states. But, in the situation where, Russia is the second largest exporter of crude oil after Saudi Arabia and  also the world’s top producer of natural gas, then the world should expect worst of fuel prices domestically. 

    The border tensions may have “substantial implications”, Sue Trinh of Manulife Investment Management said. Sanctions forcing Russia to supply less crude or natural gas would have “important impact on the global economy.” 

    The transport unions further noted that, the increased fares was in line with the administrative arrangement on public transport fares and comes after intense negotiations with stakeholders and in consideration of the plight of drivers, commuters and the general public. 

    But, an economist has noted that stakeholders should expect the upcoming 15% increase in transport fares as announced by the Road Transport Operators, to increase national inflation in the coming months.

    “The point is that with the rising cost of living and fuel prices, drivers will certainly ask for an increment in fares. If you, however, look at the non-food basket of inflation, transport accounts for about 10.1%. That tells you that it will slightly affect other things like food and other things, but it won’t lead to a major shake-up in the national inflation rate”, Head of the Economics Division at the Institute of Statistical, Social and Economic Research, at the University of Ghana, Prof. Peter Quartey has said. “It will lead to some inflation but it shouldn’t be major.”

    Prof. Quartey further expressed hope that the impact of the transport fares increase on inflation will be dampened with an increase in food production.

    “The impact of the rise in transport fares can be dampened if our food production increases. You know inflation is caused by demand and supply-side factors, so if the supply side improves, it will dampen some of these occurrences. It might not erode it completely, but it will dampen any hikes. And we’ve seen the rains coming in and the likes, so production of some food items should mitigate the impact of transport fares on inflation.”