Crude Oil and Refined Products Market Review and Outlook
Global crude oil prices plummeted to their lowest levels since January 2024 in the 11th to 26th May pricing window. Although the global demand had been projected by the International Energy Agency (IEA) to rise by 1.1 mb/d in 2024, the recent decline in prices is attributed to lackluster demand among some European countries. The significant surge in crude prices in April to as high as USD90/bbl was due to the tensions between Iran and Israel within that period. Crude prices rose from an average of USD81.72/bbl in Q1 to USD90.39/bbl in April before declining to an average of USD81.27/bbl in the second window of May 2024.
- Petrol, Diesel, and LPG fell by 4.17%,0.87%, and 3.44% respectively in the window under review. This represents a surge of 2.78%, 8.45%, and 4.29% for petrol, diesel, and LPG respectively on a year-on-year basis. While on a year-to-date basis crude oil and petrol rose by 3.81% and 13.01% respectively, diesel and LPG declined by 4.23% and 22.29% respectively.
The depreciating Cedi is anticipated to negate the potential transfer of the benefits of the reduced crude prices to petroleum consumers in Ghana. Global petroleum prices, however, are expected to increase in the coming months due to the expected surge in crude demand going into the summer months and the projection of output cuts by OPEC+ nations in Q3.
FuFeX30 and Spot Rates
The Fufex30 [1] for the second selling window of May (1st to 15th June 2024) is estimated at GHS15.1000/USD, while the applicable spot rate for cash sales is GHS14.9000/USD based on quotations received from oil financing commercial banks.
| SUMMARY REPORT OF BANK OF GHANA FX AUCTIONS TO BIDECs | ||
| Window | Percentage Offered | Auction FX Rate (GHS/USD) |
| 16th to 29th February 2024 | 23% | 12.4888 |
| 1st to 15th March 2024 | 23% | 12.7291 |
| 16th to 31st March 2024 | 22% | 12.9737 |
| 1st to 15th April 2024 | 30% | 13.1160 |
| 16th to 30th April 2024 | 31% | 13.2259 |
| 1st to 15th May 2024 | 29% | 13.8643 |
| 16th to 31st May 2024 | 30% | 14.1419 |
| 1st to 15th June 2024 | 29% | 14.8388 |
The BoG’s bi-weekly FX auction to BIDECs in the 1st to 15th June 2024 pricing window for the purchase of petroleum products was US$20 million, representing 29% of BIDECs’ bid. The FX rate at which the BoG auctioned to BIDECs rose from GHS14.1419 to GHS14.8388 per USD, representing a depreciation of 22.13% year-to-date. The passthrough effect of the depreciation is usually felt at the pumps in higher petroleum prices.
The Ex-Refinery Price Indicator (Xpi)
The Ex-ref price indicator (Xpi) is computed using the referenced international market prices usually adopted by BIDECs, factoring in the CBOD economic breakeven benchmark premium for a given window, and converting from USD/mt to GHS/ltr using the Fufex30 for sales on credit and the spot FX rate for sales on cash.
Ex-ref Price Effective 1st to 15th June 2024
Price Component Petrol Diesel LPG
| Average World Market Price (US$/mt) | 851.7300 | 749.7000 | 444.8000 |
| CBOD Benchmark Breakeven Premium (US$/mt) | 120 | 120 | 260 |
| Spot FX Rates | 14.9000 | 14.9000 | 14.9000 |
| FuFex30 (GHS/USD) | 15.1000 | 15.1000 | 15.1000 |
| Volume Conversion Factor (ltr/mt) | 1324.50 | 1183.43 | 1000.00 |
| Ex-ref Price (GHS/ltr) Cash Sales | 10.9315/ltr | 10.9500/ltr | 10.5015/kg |
| Ex-ref Price (GHS/ltr) 45-day Credit Sales | 11.0782/ltr | 11.0970/ltr | 10.6425/kg |
| Price Tolerance | +1%/-1% | +1%/-1% | +1%/-1% |
Taxes, Levies, and Regulatory Margins
Total taxes, levies, and regulatory margins within the 16th to 31st May 2024 selling window accounted for 22.52%, 22.26%, and 13.48% of the ex-pump prices of petrol, diesel, and LPG, respectively.
| TRM Components Petrol (GHS/ltr) | Diesel (GHS/ltr) LPG (GHS/KG) | ||
| ENERGY DEBT RECOVERY LEVY | 0.49 | 0.49 | 0.41 |
| ROAD FUND LEVY | 0.48 | 0.48 | – |
| ENERGY FUND LEVY | 0.01 | 0.01 | – |
| PRICE STABILISATION & RECOVERY LEVY | 0.16 | 0.14 | 0.14 |
| SANITATION & POLLUTION LEVY | 0.10 | 0.10 | – |
| ENERGY SECTOR RECOVERY LEVY | 0.20 | 0.20 | 0.18 |
| PRIMARY DISTRIBUTION MARGIN | 0.26 | 0.26 | – |
| BOST MARGIN | 0.12 | 0.12 | – |
| FUEL MARKING MARGIN | 0.09 | 0.09 | – |
| SPECIAL PETROLEUM TAX | 0.46 | 0.46 | 0.48 |
| UPPF | 0.85 | 0.85 | 0.85 |
| DISTRIBUTION/PROMOTION MARGIN | – | – | 0.05 |
| TOTAL | 3.22 | 3.20 | 2.11 |
OMC Pricing Performance: 16th to 31st May 2024
Petrol and Diesel prices rose to their highest since February 2023 in the window under review mainly due to the sharp depreciation of the Ghanaian cedi against major trading currencies, especially the USD.
Since March 2024, LPG prices have risen above GHS15/Kg attributable to the depreciation of the Cedi and other charges imposed on LPG by the regulator of the sector. As a result, LPG prices have risen by over 52.71% since October 2023.
The average pump prices of petroleum products from the 16th to 31st May 2024 increased, largely due to the depreciation of the Cedi against the dollar.
The Ghanaian Cedi has depreciated by an average of over GHS2.0000 against the USD since January 2024, this has greatly impacted the price of petroleum products at the pumps.
Pump prices of petrol have increased by over 50% since March 2022 and by over GHS2/Ltr on average since January 2024. Petrol pump prices, which averaged GHS9.3390/Ltr in 2022, are currently being quoted at about GHS14.3000/Ltr by some OMCs. This surge is largely attributed to the sharp depreciation of the Cedi.
Pump prices for diesel have also risen above GHS14.60 per liter for the first time since February 2023. Presently, diesel is being sold at an average rate of GHS14.3880/Ltr, compared to GHS12.7450/Ltr and GHS10.2740/Ltr in 2023 and 2022, respectively.
Pump prices of petrol, diesel, and LPG are expected to remain unchanged in the 1st to 15th June 2024 pricing window due to the depreciation of the cedi against the US dollar.
[1] The Fufex30 is a 30-day GHS/USD forward fx rate used as a benchmark rate for BIDECs ex-ref price estimations.
