The Chamber of Petroleum Consumers Ghana (COPEC), says it will not rule out the possibility of going to court to compel Oil Marketing Companies (OMCs) in the country to reduce fuel prices.
The threat comes after a conflict over crude oil prices between Saudi Arabia and Russia pushed the global price of crude oil down by almost 30 percent, the lowest in four years
COPEC is demanding that OMCs also reduce their fuel prices inconsonant with the deregulation policy which allows fuel stations to increase their prices when the price goes up and vice versa.
Speaking to Citi Business News, the Executive Director of COPEC, Duncan Amoah, said he will be compelled to go to the court if OMCs do not reduce their fuel prices by end of this week.
“We are saying that there is every justification for the prices at the pumps to be reduced. If this is not done by the end of the week, we will have no option but to go to court. I don’t think the court will allow the OMCs to cheat the public,” he said.
COPEC is specifically looking at a 10 percent reduction in petroleum prices at the pumps.
“If we use today’s price, then the fall in the International price of crude oil is more than 50 percent since the beginning of the year. We have seen also the cedi appreciate also for more than 5.6 percent from the beginning of the year, yet the local price has not gone down by more than 5 percent from the beginning of the year,” Mr. Amoah argued.
“That is woefully inadequate. So, one would have expected that these two key variables, the international price of crude oil and also the local currency’s appreciation against the US dollar would have given consumers some form of relief, and we thought that if prices go down, then, of course, it goes to support positively the disposable income of Ghanaians,” he added.
He says the argument that a reduction may be too early since the prices of crude change rapidly, is not tenable because OMCs do not wait for a longer time to increase prices when it is in their interest. World Price Slump
Oil prices saw its lowest drop since 1991 on Monday, March 9, 2020, after Saudi Arabia started a price war with Russia by slashing its selling prices and pledging to unleash its pent-up supply onto a market reeling from falling demand because of the coronavirus outbreak.
Prior to this huge slash, crude prices had been relatively stable. By this, prices are generally expected to go down significantly at the pumps, to ease pressure on consumers.
Brent crude futures fell by as much as $14.25, or 31.5%, to $31.02 a barrel. That was the biggest percentage drop since Jan. 17, 1991, at the start of the first Gulf War and the lowest since February 12, 2016. It was trading at $35.75 at 0114 GMT.
U.S. West Texas Intermediate (WTI) crude fell by as much as $11.28, or 27.4%, to $30 a barrel. That was also the biggest percentage drop since the first Gulf War in January 1991 and the lowest since February 22, 2016. It was trading at $32.61.
Saudi Arabia, the world’s biggest oil exporter, is attempting to punish Russia, the world’s second-largest producer, for balking on Friday at production cuts proposed by the Organization of the Petroleum Exporting Countries (OPEC).