Fuel prices at the pumps decreased marginally as major Oil Marketing Companies (OMCs) in the country reduced the prices of petroleum products at the stations in the last pricing window for 2022.
This is because the National Petroleum Authority(NPA) used a forex estimate rate of ¢14.01 to $1 for the second pricing window.
This is why fuel prices reduced marginally and not significantly as anticipated when the cedi’s comeback against the dollar was about 52%.
Data from the Bank of Ghana indicate that as of December 15, 2022, the local currency wrestled the US dollar and appreciated by 63.7 per cent in the process (now selling at around GH¢8), thereby trimming down the year-to-date depreciation to 24.9 per cent.
However, in 2023, the first pricing window being the 1st of January, the NPA is likely to use a forex estimation rate of ¢10.07 to $1.
Crude oil on the world market is also estimated to be reduced. So in the next pricing window, January 1st, 2023, prices of fuel will go down significantly.
In Ghana, the price of fuel is determined by a formula that takes into consideration the following four and sometimes five factors:
1. The world market price of crude.
2. The freight cost from the source to Ghana, storage costs and all other associated costs incurred before supply to retail outlets. This is mostly referred to as the Suppliers’ Premium or margin.
3. The exchange rate; the dollar to cedi rate
4. The taxes/levies by government
5. The OMC margins (OMC “individual fuel stations” profits).
With the price of freight coming down because of the appreciation of the cedi and the reduction of crude oil prices on the world market, you can expect some significant reduction in petroleum products by January 1, 2023.
Meanwhile, market leader GOIL has reduced the price of petrol to GH¢13.40 per litre from the previous GH¢15.80 in the last pricing window for 2022, representing more than a GH¢2 drop from its previous price, translating into about a 15% decrease.
Diesel decreased to GH¢16.10 per litre from the previous GH₵18.86.
TotalEnergies is selling petrol for GH¢13.40 per litre, while diesel is going for GH¢15.85 per litre.
The price decrease translates to about a 15% per cent drop in petrol and diesel.