Ghanaians Asked To Prepare For another Fuel Price Hike

Accra, Ghana (PANA) - Petroleum companies operating in Ghana Tuesday warned consumers to brace themselves for rise in the prices of petroleum products in the coming weeks to fall in line with current world market trends.

The Bulk Oil Storage and Transport Company, Tema Oil Refinery and oil marketing companies said they can no longer absorb the high production costs that have arisen since the beginning of the year due to increased world market prices.

The deputy director of Tema Oil Refinery, Lovelace Prempeh, told a press conference that the price of crude oil has increased by about 120 percent since the beginning of the year.

"As at February 1999, the price of crude oil was 10.52 US dollars per barrel, rising to 17.22 dollars per barrel in June. This, again, shot up to 20.69 dollars on 1 September. Last Friday, the price of crude oil was fixed at 23 dollars per barrel," he added.

Prempeh said whereas crude oil was imported at five million dollars per cargo in 1998, "we now pay as much as 10.4 million dollars", describing it as "exorbitant."

He added that the company needs to recover its cost of production in the areas of inputs and other manufacturing expenses such as chemicals and maintenance of plant equipment.

He explained that with the increases in the cost of utilities, financial charges and insurance, Tema Oil Refinery has no choice but to slap an increase in order to make it survive.

"If no adjustments are made now, the refinery will be making huge losses, will not have the required cash-flow to finance its credit lines and consequently would run bankrupt," he pointed out.

He complained that Tema Oil Refinery lost some 146 billion dollars in 1998 despite the high demand for petrol and diesel at the time.