Oil Marketing Companies (OMCs) project a slight reduction in fuel prices starting September 16, 2024, provided the Ghana cedi performs well against the US dollar.
The Chief Executive of the Association of Oil Marketing Companies, Dr. Riverson Oppong, noted that fuel prices have remained stable over the past few weeks.
“All the variables that influence prices of petroleum products have been fairly stable over the past week and if that is sustained going forward, then there should be a reduction in prices at the pumps,” he explained.
Dr. Oppong emphasized that the performance of the Ghana cedi will be a crucial factor in determining fuel prices from September 16, 2024, for various oil marketing companies.
The Ghanaian Cedi has surpassed GH¢16 against the US Dollar in the currency retail market.
However, Finance Minister Dr. Mohammed Amin Adam, in his monthly update on the economy on August 30, said that the Cedi has largely stabilized against major trading currencies since 2023, despite facing some recent pressures that have since eased.
The Minister reported that Cedi’s depreciation against the US Dollar improved from 54% in November 2022 to 27.8% in December 2023, compared to 30.0% in December 2022.
Dr Oppong explained that the cedi’s stability or fluctuation could significantly influence the decision to adjust prices.
Additionally, he addressed criticisms suggesting that oil marketing companies are slow to adjust prices in response to market changes.
He refuted these claims by explaining that price adjustments are carefully considered and based on a range of economic factors beyond immediate market fluctuations.
“There is always a reason, why the OMCs delay in reviewing prices at the pumps, and that has nothing to do with the arguments that they want to shortchange consumers,” he defended.
Some OMCs earlier this month started reviewing prices at the pumps mainly influenced by the cedi’s stability and a decrease in prices of crude oil on the international market.
Dr Oppong rejected the arguments that some of the OMCs collude to fix the prices of petroleum products.
“The Market is very competitive and it might be difficult for any operator to collude with another player”.
“OMCs have little influence on the prices, this is because we take the price from Bulk Oil Distributors based on price. We factor the various levies and taxes and then our margins”.
“Our cost inputs are very high and margins are small and most of our members are struggling to break even and that is a fact”, he added.
Dr Oppong revealed that the association is working to deal with complaints of service quality issues that have come up in recent times from some consumers.
“Our sector can be described as the most regulated in the industry. We are regulated by the National Petroleum Authority and Ghana Standards Authority. You shouldn’t see some of these product quality issues coming up that often”.