Fuel price to rise by 3.7% – COPEC

The price of petrol at the pump is expected to rise by 3.7%, the Chamber of Petroleum Consumers (COPEC) has predicted.

In a statement, COPEC said Brent crude plunged by 10.7% to $73.45/barrel on 26 November 2021 and the OPEC Reference Basket (OPB) plunged by 6.9% to $76.09/barrel on the same date.

It said the OPB further tumbled to $70.07/barrel on 2 December 2021.

The plummeting crude oil prices were due to the new Omicron variant of the COVID-19 pandemic, which restricted mobility in some countries, coupled with the expectation of gradual increase in oil production by the Organisation of Petroleum Exporting Countries (OPEC)+.

However, Brent crude futures settled at $1.56 or 2.1% at $76.85 a barrel, the highest close since 26 November 2021, and a gain of 4.5% on the week as of 23 December 2021.

Additionally, the U.S. West Texas Intermediate (WTI) crude futures ended at $1.03 or 1.4% at $73.79 a barrel, to rise 4.1% on the week as of 23 December 2021.

COPEC said the surge in crude oil prices is due to supply disruptions in Libya, which cut flow by about 300,000 b/d in addition to the “lower anxiety toward the 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 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 ex-pump price in the same widow is $641.38/MT.

The NPA set the Ghana cedi at GHS6.4040 against the dollar.

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 GHS0.75 based on the flexibility of OMC margins, as well as a forward rate of GHS6.4040 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.

The ex-pump prices of petrol and diesel are expected to surge by 3.7% and 2.5%, respectively.

In nominal terms, ex-pump prices of petrol and diesel are expected to increase by 24 pesewas and 17 pesewas, respectively.

The average surge for both products in nominal terms is 20 pesewas representing 3.1%.

Some OMCs could increase their prices less than the 20 pesewas increase due to competition.

COPEC said if the government suspends the zeroing of the PSRL on diesel, petrol and LPG, then ex-pump prices could surge by, at least, 34 pesewas