An analysis by the Institute for Energy Security (IES), suggests petroleum products are likely to see a reprieve in liquid fuel prices from the middle of February 2025, on account of global cost reductions.
However, the price fall is likely to be tempered by depreciation of the cedi; therefore, motorists and allied consumers of the product might not get the full impact of the expected reduction.
Brent crude oil, the global benchmark, saw a steady decline in early February – falling 5.65 percent from US$81.08 per barrel to US$74.74 per barrel by end of the first pricing window. The drop was driven by an increase in U.S. crude oil inventories and seasonal trends.
In line with the crude oil price movement, refined petroleum products also registered declines. Data from Standard & Poor’s (S&P) Platts indicate that between the start and midpoint of February, gasoline prices fell by 1.26 percent to US$722.17 per metric tonne while gasoil (diesel) dropped 4.50 percent to US$708.67 per metric tonne.
Also, Liquefied Petroleum Gas (LPG) declined marginally by 0.22 percent to US$622.46 per metric tonne.
Despite the decline in global fuel prices, the cedi weakened by 2.18 percent in the first pricing window – trading at GH¢15.42 per U.S. dollar compared to GH¢15.09 earlier in the month, resulting in an increase of petroleum imports’ cost .
Thus, the IES forecasts a slight reduction in liquid fuel prices while LPG prices are expected to remain unchanged. Given the anticipated downward adjustment in liquid fuel prices, consumers may see marginal relief in petrol and diesel costs. However, LPG – widely used by households and businesses – is unlikely to change.
This notwithstanding, the impact will depend on how significantly Oil Marketing Companies (OMCs) adjust their prices in response to global market trends and forex pressures.
Meanwhile, the Ghana cedi continued its strong performance against the US dollar in the retail market on February 17 after a week of mixed performance against the major foreign currencies. It traded at an average GH¢15.75 against the American dollar.
Analysts expect the local currency to remain steady throughout the week.