The Chamber of Petroleum Consumers-Ghana (COPEC) says that fuel prices in Ghana are unlikely to go down despite massive reduction in the international market.
Crude oil prices on the international market have dropped significantly due to the drop in demand of the product as a result of the coronavirus pandemic.
Only yesterday, WTI is reported to be trading at -$15, which is said to be the lowest in decades.
Owing to this many consumers of petroleum product are expecting a reflection of same in the ex-pump oil prices in fuel stations in the country.
But COPEC, in a press statement signed by its Executive Secretary, Mr Duncan Amoah, remarked Fuel prices may remain the same in spite of the global market price drop.
COPEC remarks is hinged on the fact that Brent crude, whose benchmark the Ghanaian market is largely dependent upon, trades around $26, hence the reason why fuel prices are unlikely to fall in the country.
“The Ghanaian market is largely Brent benchmark dependent and as such a collapse on WTI is quite unlikely to have any trickle-down effect on local pump prices here,” Duncan Amoah said in the statement on Tuesday, April 21.
COPEC, however, admonished the government to take advantage of the situation to help the Bulk Oil Storage and Transportation (BOST) in expanding its capacity to store in large quantities of the fuel.
Below is the COPEC statement
CHAMBER OF PETROLEUM CONSUMERS-GHANA
Social media is currently awash with news of the collapse of Oil prices internationally with a section of Ghanaians demanding this price collapse immediately reflect at the pumps.
Yes, it is indeed true that oil prices especially the WTI platform Is currently trading at -$15 which is about the lowest in several decades.
Brent however is still trading around $26 as at close of day and as such pump prices are very unlikely to see any reductions as is being expected by a cross section of the Ghanaian public.
The disparity in the two benchmarks is largely due to a supposed unavailability of storage space across the US market with some traders allegedly paying for cargo to be returned before the close of the futures market for the month of April on 22/04/20.
This pricing collapse is largely reflected on crude and has very little direct impact on processed or refined products and by extension local pump prices.
Moreover, the Ghanaian market is largely Brent benchmark dependent and as such a collapse on WTI is quite unlikely to have any trickle down effect on local pump prices here.
We do believe this notwithstanding, however, that the markets are ripe for the Ghana Government to consider helping The Bulk Oil Storage and Transportation ( BOST ) to get a good credit line or an open credit system in place immediately to stock Oil at this point for the country’s strategic reserves or stocking needs.
The Government should also consider getting our local refinery back to productivity in order to process Ghana’s oil locally as we understand some of our producers or Oil fields may be soon forced to shut down production due to lack of storage space globally.
Whatever security guarantees or arrangements that needs to be put in place to forestall any games with the strategic reserves must certainly be robust and efficient so the country does not lose on both the upstream and downstream ends due to the low prices being recorded on the international market currently.