Prices of Petroleum Products To Go Up 20%

Fuel prices in Ghana may be adjusted upward today by about 15% to 20%, in line with the full cost recovery scheme, the closure of the Tema Oil Refinery (TOR) and world market trends.

The Chief Executive Officer of the National Petroleum Authority (NPA), Mr. John Attafuah, hinted the Business Chronicle yesterday that the price adjustment would also be based on the average crude price increases of about 11 to 12% experienced since the beginning of the year.

January this year saw crude prices hitting $68 per barrel because of Iran's nuclear and Nigerian hostage crises.

"Therefore we need to account for January and make up for what we have lost due to the January increase, otherwise it is subsidy. We would look at January and adjust it against February," he said, adding that on the average, increases in crude oil prices were 11 to 12%, causing shortfalls.

"The filling of the gap has to be done and quickly." He explained that it is necessary we do not wait too long.

"We have seen February coming down and if come March, we have recovered, then we would add that also to the consumer."
The TOR would also be closing down for routine maintenance in March and the CEO said measures are being put in place to make sure shortages do not occur in the country. Explaining the implications of TOR's closure, he said customers would lose the efficiencies of TOR, which had helped them to price fuel products below world prices.
"It also means we have to go to the market to buy refined products at the same price as others."
Based on this he said the principle of full cost recovery would be applied. "That is why full cost recovery would be real. That is what Ghanaians are going to see; real full cost recovery and not awaited cost recovery."
Before going to press yesterday, the Board of Directors of the NPA was meeting to approve the new adjustments.
The upward adjustment would affect mainly kerosene and premium petrol.
Explaining the reasons why demand for kerosene and aviation fuel had shot up, he said kerosene was in high demand because it was misused and there had been an increase in the frequency with which airlines plied the country.
With the closure of the refinery in March, Ghana would import most of its petroleum products.
On the expansion of the refinery to handle shortages in the system, the CEO said it was the decision of the board of TOR.
Meanwhile, the NPA met with the oil marketing companies and all were happy with the arrangement. Currently, a gallon of kerosene is ?28,948.00 and that of premium petrol is ?31,800.00