The Institute for Energy Security IES, has released its much-awaited statement for the second Pricing-Window of June 2018 projecting stability of fuel prices at the pumps.

The IES statement, signed by IES Research Analyst Mikdad Mohammed said but for a 1.7% depreciation of the cedi against the dollar in the window under review, fuel prices would have been headed downwards.

In reviewing the last window, IES said The National Petroleum Authority (NPA) failed to intervene with the Price Stabilization and Recovery Levy (PSRL) which led to “one of the widest jumps in prices of petroleum products on the market within a single window” as “fuel prices went up by 4.7%, above the 3% threshold IES projected on 1st June.”

“The national average prices for Gasoline and Gasoil initially saw an increment of over GHp20, pegging prices at GH¢4.89 for both Gasoil and Gasoline in the first 6 days of the window. GOIL and some major oil marketing companies (OMCs) later revised their prices downwards by 0.04GHp (0.81%) to close the window; and putting the national average price for Gasoil and Gasoline at GH¢4.81 and GH¢4.83 respectively.” The statement referred stakeholders.

The IES’ projection for this window said “the poor performance of the Ghana Cedi against major trading currency for global oil may negate any price fall expected at the pump within the second Pricing-window for the month of June.”

“With both Brent crude and Gasoline falling by 3.22% and 0.85% respectively on average terms, coupled with an appreciable stock level and an insignificant rise in Platts average for Gasoline; the local fuel market could be heading towards a price fall…”, but for the depreciation recorded.

Read texx of the full statement below

REVIEW OF FIRST PRICING WINDOW FOR JUNE 2018

Local Fuel Market Performance

The National Petroleum Authority (NPA) failed to intervene with the Price Stabilization and Recovery Levy (PSRL) in the Pricing-window under review, leading to one of the widest jumps in prices of petroleum products on the market within a single window. Fuel prices went up by 4.7%, above the 3% threshold, IES projected. The national average prices for Gasoline and Gasoil initially saw an increment of over GHp20, pegging prices at GH¢4.89 for both Gasoil and Gasoline in the first 6days of the window. GOIL and some major oil marketing companies (OMCs) later revised their prices downwards by 0.04GHp (0.81%) to close the window; and putting the national average price for Gasoil and Gasoline at GH¢4.81 and GH¢4.83 respectively. IES Market-Scan shows that Zen Petroleum continues to sell lowest priced Gasoline and Gasoil on the market, followed by Benab Oil, Pacific, Lucky Oil, Puma and Frimps Oil.

World Oil Market Prices

Brent crude prices was volatile for the most part of the window under consideration with eyes fixed on the outcome of OPEC’s meeting later this month even as Saudi Arabia has increased its output by 161,400 barrels a day. An observation of the market shows Brent Crude is trading at an average of $76.23 compared to the past 14days figure of $78.77 per barrel. At the close of trading on 13th June Brent crude was selling at $76.62, close to the previous window figure of $76.02 per barrel.

In Standard and Poor’s Global Platts estimation, Gasoline reduced by 0.85% to close trading at $715.25 per metric tonne, from a previous average of $721.40 per metric tonne. Gasoil moved up slightly by 0.14%, closing the window at $674.00 per metric tonne.

Local Forex and Fuel Stock

Forex performance of the local currency Cedi against the dollar in the course of this window has been weak. IES Economic desk data collected within the period implies that the Ghana Cedi depreciated by 1.7% against the U.S. Dollar, from a previous trading average of GH¢4.62 to close the window at GH¢4.70.

No crude oil was imported into the country over the last 15days. However, Gasoil (85,846mt), Gasoline (89,526mt) and Butane (13,300mt) were discharged from the various terminals to add on to the country’s fuel stock.

PROJECTIONS FOR JUNE 2018 SECOND PRICING-WINDOW

With both Brent crude and Gasoline falling by 3.22% and 0.85% respectively on average terms, coupled with an appreciable stock level and an insignificant rise in Platts average for Gasoline; the local fuel market could be heading towards a price fall. However, the poor performance of the Ghana Cedi against major trading currency for global oil may negate any price fall expected at the pump within the second Pricing-window for the month of June.

Signed: MIKDAD MOHAMMED

Research Analyst, IES