Due to the rapid depreciation of the cedi, fuel consumers in Ghana are unlikely to benefit from the expected decrease in pump prices, despite a decline in global petroleum prices.
The Ghana cedi continues to lose ground to the major trading currencies this week, especially the US dollar.
Businesses have expressed their frustration over the current state of the cedi.
The cedi was trading against the dollar at GH₵ 11.98 on Monday, May 13.
However, it crossed GH₵ 15.24 at the close of business day on May 16 at the forex bureaus, resulting in a depreciation rate of close to 20% since the beginning of the year.
The second petroleum pricing window for May began on Thursday, May 16.
Analysts predicted a marginal decrease in prices, but the cedi’s depreciation is expected to offset this decrease.
International market trends show a significant decline in refined petroleum products, with petrol and diesel prices falling by 5.68% and 4.51%, respectively, according to the Institute of Energy Security (IES).
However, the cedi’s depreciation, which has lost 8-10% of its value in the past two weeks, is expected to erode this decrease, leaving consumers with minimal relief.
A research and policy analyst at IES, Derrick Xaste, predicted a minimal reduction in prices, around 2%, due to the cedi and competitive pricing strategies of oil marketing companies (OMCs).
“We expect prices to reduce but not significantly. If it hadn’t been for the cedi depreciation, the reduction would have been more significant. We expect some form of reduction, but you know the forces of demand and supply and the competitive pricing strategies by the various OMCs might bring some sort of slight reduction because they are all competing for the same consumer base.”
“I cannot predict for them because they all have their pricing strategy. They will equally also make a move depending on their other competitors what they’ll be doing, so I cannot take that decision for them, but that reduction cannot be more than 2%,” Mr Xaste said in an interview with Citi News.
Meanwhile, Duncan Amoah, the Executive Director of the Chamber of Petroleum Consumers, has warned that prices may remain stable or even increase if the cedi continues to depreciate.
As of May 16 on the first day of the 2nd pricing window, major OMCs like Goil and Total Energies had maintained their prices, with petrol and diesel selling at GHc14.40 and GHc14.65, respectively.