Local Fuel Market Performance
The price of fuel on the local Ghanaian market experienced marginal increments within the window under assessment. Price of petroleum products within the second Pricing-window of August 2021 saw some of the Oil Marketing Companies (OMCs) increase their prices at the pump by 2 percent.
This was occasioned mainly by the depreciation of the local currency by about 3 percent within the period. The current national average price of fuel per litre at the pump therefore is pegged at Gh¢6.10 for both Gasoline and Gasoil.
The IES Market-Scan picked Benab Oil, Zen Petroleum, Cash Oil, Goodness Oil and Top Oil as the OMCs that sold the least-priced fuel on the local market for the window under review.
World Oil Market
The International Benchmark Brent Crude saw its price tumble within the period with prices selling on average at about $69.39 per barrel mark, a 3.75 percent decrease from the previous window’s average price of $72.10 per barrel mark.
The spread of the virus and the delimiting of China’s role in the supply chain affected the price of the commodities within this window.
The price dip in the second pricing window of August was occasioned by the 4th wave of the coronavirus infections being experienced across many areas particularly in Asia where the world’s largest crude importer, China has had to impose restrictions that is affecting oil supply.
The dip which saw Brent crude fall by some 8 percent within the period was the biggest case of losses in 9 months following the seven sessions of decline recorded of its price.
The slowdown in refining throughput and the economic activities in China due to the increasing spread of the Delta variant of the virus has been identified as one of the causes for the price slump. This was particularly the case as there was a slowed pace in factory operations and output and retail sales growth in the country.
The price fall was also influenced by the reduced fuel demand on daily basis in July that was the lowest daily demand rate since May 2020 as crude refineries in the country cut their production capacity in response to tighter quotas, elevated inventories and falling profits.
The price begun rising in the period due to the weakness of the Dollar index which when measured against its six peers, was down by 0.4 percent. This was also supported by the strong global equities market.
The price of the refined products, Gasoline and Gasoil prices as monitored on Standard and Poor’s global Platts platform however experienced marginal changes within the period.
The price of Gasoline decreased by about 0.47 percent to close the window at $722.75 per metric tonne from its earlier price of $726.15 per metric tonne. Price of Gasoil however increased within the period by 1.63 percent to close trading at $598.25 per metric tonne from its earlier price of $588.67 per metric tonne in the previous window.
Data monitored by the IES Economic Desk from the Foreign Exchange (Forex) market shows that the Cedi saw a sharp depreciation against the U.S. Dollar by 1.36 percent to close trading in the window at Gh¢5.95 to the US Dollar from the previous window’s Gh¢5.87 to the US Dollar.
PROJECTIONS FOR SEPTEMBER 2021 FIRST PRICING-WINDOW
For the September First Pricing-Window, with the 3.75 percent reduction in the price of the International Benchmark- Brent crude, the 0.47 percent decrease in price of Gasoline, the 1.63 percent increase in Gasoil price and the sharp depreciation of 1.36 percent of the local currency against the US Dollar; the Institute for Energy Security (IES) projects for price of fuel on the domestic market at the various pumps to remain stable.