Crude Oil and Refined Products Market Review and Outlook
Crude oil prices declined by about 3 percent from January to December 2023. The decline is attributed to weak global demand and a slower post-COVID-19 economic recovery. Global macroeconomic indicators show that economic growth fell below expectations in 2023 due to a weak post-COVID-19 recovery and higher inflation and interest rates in Europe and the US. Although the OPEC+ nations embarked on a series of production cuts to influence prices, this did not yield a sustained result. The IEA has also projected that the global slowdown is expected to continue in 2024 as GDP growth is projected to grow below trends.
The demand for petroleum products has been witnessing significant declines since the first selling window of October 2023 due to the slowdown in global demand. According to CITAC Africa, higher inflation and interest rates in the US, Europe, and China slowed down global economic growth. Thus, weakening the outlook for oil demand growth.
The international market price of diesel and LPG declined by 1.6% and 8.7%, respectively, while petrol rose by 3.3%. Compared to the same period last year, diesel and LPG prices declined by 0.3% and 13.9% respectively, while petrol rose by 0.5%. From January 2023, while the international market price of diesel and LPG declined by 14.5% and 3.8%, respectively, petrol rose by 8.4%.
FuFeX30 and Spot Rates
The Fufex30[1] for the second selling window of January (16th to 31st January 2024) is estimated at GHS12.2500/USD, while the applicable spot rate for cash sales is GHS12.1500/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 – 31st October 2023 | 20% | 11.6435 |
| 1st – 15th November 2023 | 21% | 11.6824 |
| 16th – 30th November 2023 | 21% | 11.9131 |
| 1st to 15th December 2023 | 19% | 11.9131 |
| 16th to 31st December 2024 | 29% | 12.1512 |
| 1st to 15th January 2024 | 19% | 12.1497 |
The BoG’s bi-weekly FX auction to BIDECs in the 1st to 15th January 2024 pricing window for the purchase of petroleum products was US$20 million, representing 19% of BIDECs’ bid. The FX rate auctioned by BoG to BIDECs was GHS12.1497/USD, the same rate as the previous window. The BOG auction rate from January to December 2023 depreciated by 28%.
The Ex-Refinery Price Indicator (Xpi)
The Ex-ref price indicator (Xpi) is computed using the referenced international market prices usually adopted by BIDECs, factoring in the CBOD economic breakeven benchmark premium for a given window, and converting from USD/mt to GHS/ltr using the Fufex30 for sales on credit and the spot FX rate for sales on cash.
[1] The Fufex30 is a 30-day Ghs/USD forward fx rate used as a benchmark rate for BIDECs ex-ref price estimations.
Ex-ref Price Effective 16th to 31st January 2024
Price Component Petrol Diesel LPG
| Average World Market Price (US$/mt) | 778.0500 | 770.2700 | 522.6400 |
| CBOD Benchmark Breakeven Premium (US$/mt) | 120 | 120 | 180 |
| Spot FX Rates | 12.1500 | 12.1500 | 12.1500 |
| FuFex30 (GHS/USD) | 12.2500 | 12.2500 | 12.2500 |
| Volume Conversion Factor (ltr/mt) | 1324.50 | 1183.43 | 1000.00 |
| Ex-ref Price (GHS/ltr) Cash Sales | 8.2381/ltr | 9.1402/ltr | 8.5371/kg |
| Ex-ref Price (GHS/ltr) 45-day Credit Sales | 8.3059/ltr | 9.2154/ltr | 8.6073/kg |
| Price Tolerance | +1%/-1% | +1%/-1% | +1%/-1% |
Taxes, Levies, and Regulatory Margins
Total taxes, levies, and regulatory margins within the 1st to 15th January 2024 selling window accounted for 25%, 23%, and 15% of the ex-pump prices of petrol, diesel, and LPG, respectively.
| TRM Components | Gasoline (GHS/ltr) | Gasoil (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 | 0.13 | 0.13 | – |
| BOST MARGIN | 0.09 | 0.09 | – |
| FUEL MARKING MARGIN | 0.5 | 0.09 | – |
| SPECIAL PETROLEUM TAX | 0.46 | 0.46 | 0.48 |
| UPPF | 0.75 | 0.75 | 0.75 |
| DISTRIBUTION/PROMOTION MARGIN | – | – | 0.05 |
| TOTAL | 2.96 | 2.94 | 2.01 |
OMC Pricing Performance: 1st to 15th January 2024
The average pump prices of petroleum products for the 1st to 15th January 2024 (first selling window of the year) declined compared to the previous window. In tandem with the fall in petroleum product prices on the international market, pump prices declined, although marginally due to the slight depreciation of the Cedi against the US dollar.
Pump prices of petrol within the period declined by about 1.1% to GHS 11.9622/Ltr. This was mainly due to the decline in global prices by about 1%. On a y-o-y basis, petrol pump prices declined by about 3.2%.
Like the pump price of petrol, diesel prices declined by about 1.5% to an average of GHS12.6844/ltr in the 1st to 15th January 2024. On a year-on-year basis, pump prices for diesel declined by about 13.2%. This rise is attributed to international market factors, as the Cedi/USD exchange rate depreciated slightly in Q4.
Going into the second selling window, fuel prices are expected to continue to decline given the ongoing decline in global crude prices and the slight stability of the Cedi/USD exchange rate.
