Chief Executive of the Chamber of Bulk Oil Distributors (CBOD), Dr. Patrick Ofori, says fuel prices in Ghana would be much lower today if global conflicts had not disrupted the international oil market.
According to him, the ongoing tensions involving the United States and Israel have affected petroleum supply chains worldwide, pushing fuel prices upward over the past year.
He explained that the cost of petroleum products increased sharply during the period, causing petrol prices to rise by about 88 percent while diesel prices almost doubled.
“From January, pump prices almost doubled. Petrol increased by about 88 percent, and diesel was almost 100 percent higher in terms of the price at which we were buying the products,” he said.
Dr. Ofori believes Ghanaians could currently be buying fuel at much lower prices if the global market had remained stable.
“If there was no war, and looking at where the Bank of Ghana auction rate is today, we would be buying these products at around GH¢9 or GH¢10 at most,” he stated.
He noted that the impact of the conflict went beyond rising crude oil prices. The disturbances also created major challenges for shipping and transportation across key trade routes.
According to him, some vessels carrying petroleum products could not operate freely because of security concerns. As a result, fewer ships were available to transport fuel, increasing demand for the remaining vessels.
This situation led to a significant increase in freight costs.
“Before the war, the cost of chartering a vessel to transport products to Ghana was far lower. Once the conflict started, some of those costs increased more than five-fold,” he explained.
Dr. Ofori also revealed that insurance premiums for ships rose dramatically during the conflict. Shipping companies faced greater risks in affected regions, forcing insurers to charge much higher rates.
He said some vessels that previously required insurance coverage of about $3 million later faced premiums of up to $17 million. In some cases, insurance providers declined to offer coverage altogether.
These challenges discouraged some shipping operators from serving affected areas, putting further pressure on global fuel supplies.
Dr. Ofori added that uncertainty surrounding the duration of the conflict contributed to the price increases. Many suppliers and traders rushed to secure products because they feared prolonged disruptions to supply chains.
He further disclosed that some international suppliers focused on markets where they had established retail networks and contractual commitments. This forced countries such as Ghana to look elsewhere for fuel supplies.
Dr. Ofori warned that Ghana remains exposed to external shocks because it does not have a large strategic petroleum reserve that can provide support during supply shortages.
He explained that building such reserves requires long-term funding arrangements. Many countries, he noted, finance strategic fuel stocks through special levies and dedicated funding systems.
His remarks come at a time when global oil prices are showing signs of decline following reports of a peace agreement between the United States and Iran. If the downward trend continues, Ghanaians could see lower fuel prices in the next pricing window.
