The Chamber of Bulk Oil Distributors (CBOD), in its latest Market Outlook for the May 1–15, 2025 pricing window, highlights key global and local market developments expected to influence fuel prices in Ghana.

Despite a modest 1.38% rise in global oil prices during the first quarter of 2025, recent weeks have seen a significant reversal, with Brent crude dropping from a high of $83 per barrel in February to approximately $67 in April.

CBOD attributes this downturn to growing global uncertainty, primarily fueled by the intensifying tariff war between the United States and China.

“The continued uncertainty surrounding US-China trade negotiations is weighing heavily on global economic confidence and suppressing demand growth for crude oil,” the report stated.

Geopolitics and sanctions add to global pressure

The market decline also coincides with renewed sanctions imposed by the Trump Administration. In February, the U.S. introduced fresh restrictions targeting Iran’s nuclear program and extended sanctions to Russian entities involved in transporting Iranian oil to China.

These measures are expected to restrict refinery activity and reduce petroleum exports from China, the world’s largest crude importer, further tightening global trade flows.

Rising supply meets muted demand

Adding to the price slump, the U.S. Energy Information Administration (EIA) projects a steady rise in U.S. oil production, with output expected to average 13.59 million barrels per day (b/d) in 2025 and 13.73 million b/d in 2026.

In a departure from earlier plans, OPEC+ has announced that it will increase production starting in May instead of July.

This combination of increased supply and weakened demand has triggered broad declines in petroleum product prices. CBOD reports that, globally, crude oil prices dropped by 4.55%, petrol by 1.87%, diesel by 2.54%, and LPG by 5.55%.

Cedi strengthens, FX conditions improve

On the domestic front, CBOD reports that the FuFeX30, the benchmark rate used for pricing petroleum products sold on credit, has been set at GHS14.5000/USD for the current pricing window.

For cash sales, the spot FX rate stands slightly higher at GH¢14.7000/USD, based on commercial bank quotations.

The Bank of Ghana’s (BoG) biweekly FX auction allocated US$20 million to Bulk Import, Distribution, and Export Companies (BIDECs), covering only 22% of total bids submitted.

Nonetheless, the cedi appreciated significantly in this window, with the auction rate improving from GH¢15.5573 to GH¢14.2877 per USD, an 8.16% gain.

CBOD expects that successful implementation of the government’s 2025 Budget fiscal policy measures will reinforce cedi stability and help cushion domestic pump prices against external shocks.

Ex-Refinery Price Indicator framework

CBOD also explained that the Ex-Refinery Price Indicator (XPI), which determines pricing for petroleum products in Ghana, is based on international oil prices, a breakeven premium set by the Chamber, and applicable exchange rates.

The FuFeX30 is applied to credit-based transactions, while cash sales rely on the spot rate.

With global supply and demand dynamics continuing to shift rapidly, CBOD cautions that local fuel prices may remain volatile unless geopolitical tensions and market imbalances ease.

SP/MA

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