Depreciating cedi to negate fuel price drop – ACEP

The Executive Director of the Africa Centre for Energy Policy (ACEP), Ben Boakye has told Citi Business News petroleum prices at the pumps will not experience any significant drop in the coming weeks, even though crude oil price continues to drop on the international market.

According to him, a continuous depreciation of the cedi against the dollar will leave prices at the pumps unchanged.

Latest figures from the Institute of Energy Security (IES) show that Brent Crude is trading at an average of $76.23 compared to the past 14 days figure of $78.77 per barrel.

In an interview with Citi Business News, Mr. Boakye called on government to implement policies that will keep the local currency stable against the dollar.

He maintains this will ensure that Oil Marketing Companies (OMC) reduce prices at the pumps.

“If we are lucky to see prices falling on the international market then of course the OMCs will also have to pass it on. Most importantly however, fuel prices also depend on whether we are able to manage our currency. If the cedi remains stable and we see a decline on the international market, then the OMC will not have any choice than to pass on the reductions unto the consumers.”

Crude oil price performances

According to the IES’s review for the first pricing window for June 2018, an observation of the market showed that at the close of trading on 13th June, Brent crude was selling at $76.62, close to the previous window figure of $76.02 per barrel.

In Standard and Poor’s Global Platts estimation, Gasoline reduced by 0.85% to close trading at $715.25 per metric tonne, from a previous average of $721.40 per metric tonne.

Gasoil moved up slightly by 0.14%, closing the window at $674.00 per metric tonne.

Meanwhile local forex and fuel stock forex performance of the local currency cedi against the dollar in the course of this window has been weak.

IES Economic desk data collected within the period also implied that the Ghana cedi depreciated by 1.7% against the U.S. Dollar, from a previous trading average of GH¢4.62 to close the window at GH¢4.70.