Motorists should expect a reduction of 9 to 15 percent in the pump price of fuels, the Institute for Energy Security (IES) has projected.

With the continued price falls recorded on the international market over this month’s first pricing window, coupled with appreciation of the cedi, it said consumers are set to see further price relief at the pumps in the second pricing window for December.

It said prices should drop 9.02 percent, 8.08 percent and 7.38 percent for petrol, diesel and LPG respectively. This will result in domestic oil marketing companies reducing their prices further.

Consequently, IES said it foresees the price of various finished products reducing between 9 percent and 15 percent.

The energy think-tank said the expected price drops will be significant due to the cedi’s 6.60 percent appreciation against the US dollar.

“This means the new prices will fall around GH¢13 and GH¢16 per litre for petrol and diesel respectively, and GH¢12 per kilogramme for LPG,” it said.

The first pricing-window of December 2022 saw international market prices fall, reflecting on the domestic fuel market positively at all OMCs monitored by the Institute for Energy Security. The price reductions seen over the first half of December 2022 pegs the national average price per litre of petrol at GH¢15.16 from GH¢16.31, representing a 7.05 percent reduction over the period. Diesel’s national average price per litre moved from GH¢19.86 to GH¢18.78, falling roughly 5.44 percent… in line with IES’ predictions.

World fuel market

The global Standard & Poor’s (S&P’s) Platt averages monitored over the last pricing-window indicate that the price of petrol continues to fall, with price in the period under review dropping by 9.02 percent from US$838.78 per metric tonne to US$763.10 per metric tonne.

Diesel price also further dropped by 8.08 percent from US$969.70 per metric tonne to US$891.30 per metric tonne. LPG price also followed in same direction, falling by 7.38 percent from US$618.20 per metric tonne to US$572.58 per metric tonne.

Local forex

Data from the IES Economic Desk, as captured from the foreign exchange (Forex) market over the last two weeks, show the local currency made gains by appreciating 6.60 percent against the US dollar.

The rate at close of the period under assessment was GH¢14.03 to the US dollar from the previous rate of GH¢14.96, to the US dollar.

World oil market

International crude oil benchmark Brent fell by 8.09 percent in price over the previous window’s average price of US$89.11 per barrel to the present average price of US$81.90 per barrel.

Oil prices plummeted to their lowest point of the year in this window despite OPEC and its allies’ recent decision to continue reducing supplies, as concerns about a worldwide recession trumped supply restrictions.

Global oil prices have tumbled more than 20 percent as the threat to production from the G7 Russia price-cap has receded, allowing traders to refocus on the deteriorating outlook for consumption. Brent futures prices have slumped to less than US$77 per barrel from a recent high over US$98 just a month ago in early November.

Oil prices could witness further downtrend in the new window as recession fears continue to fuel demand concerns, with the European price-cap on Russian oil remaining a source of uncertainty.