Fuel Prices in June 2020 have increased significantly across Ghana’s fuel marketing stations.
This is not surprising, as Industry watchers were expecting price increment. Particularly following the 100 percent increase in the Bost margin on the Price Build-up (PBU) of petroleum products in Ghana by the National Petroleum Authority (NPA).
Recently, the Chief Executive Officer of the Association of Oil Marketing Companies (AOMCs), Kwaku Agyeman Duah, in an interview with the media indicated that fuel prices in June 2020 will increase by some 14 percent.
But checks by Ghana Talks Business at the various pumps indicate that prices have gone up by nearly 12 percent in the first pricing window of June 2020.
Below, are the updated prices of petrol and diesel at some fuel stations in Ghana.
The table shows an increase in pump prices as compared to prices listed on May 24. However, there are other brands which are not captured on the table, that are selling their fuel at cheaper prices. For instance, Radiance is offering Petrol at GHC4.35 and Diesel at GHC4.36.
Bost Margin Increment
On 29th May, 2020, the NPA announced an upward adjustment of the Bost margin on petroleum products by 3 to 6 pesewas.
The NPA in a circular signed by its Chief Executive Officer, Alhassan Tamppuli, said the decision to increase the margin was from Cabinet and communicated through the Ministry of Energy.
This increment was well received by players in the energy and petroleum industry.
The Executive Secretary of the Chamber of Petroleum Consumers (COPEC), Duncan Amoah, while welcoming the increment, says there is a legitimate need for the Bost to be supported with the needed investment to make it more efficient.
“Indeed, they do have a genuine need for institutional investment and this, I do think Ghanaians would probably understand”, Mr Amoah said in an interview with Joy News’ ‘Market Place” programme.
He added that “we have been made aware that Bost currently is in dire need of some investments, and some capital injections in order that they bring their operations up to some optimal efficiency point”.
Other fuel price determinants for June 2020
Also, an Analyst with the Institute of Energy Security (IES), Raymond Nuworkpor, says his outfit has always believed in Bost having the necessary investment to help them manage Ghana’s strategic reserves.
In that regard, he says, if the GHp 3.00 increment will help Bost to effectively carry out its duties, then IES fully supports it.
“If the needed investment are supposed to increase their operations and help them become effective then three pesewas will be a good idea”, he said.
Aside from the increment in the Bost margin, depreciation of the Ghanaian Cedi as against the major trading currencies is another factor causing fuel price increase.
Currently, the Cedi is trading at GH₵5.79 to the USD and GH₵7.36 to the GBP.
Furthermore, performance of crude oil in the international markets determines the price of fuel in Ghana.
WTI, Crude oil from the US markets, is currently trading at $40.11 per barrel while Brent, crude oil from the UK, is also selling at $43.07 per barrel.
It is worthy to note that significant portions of Ghana’s crude is imported from the United Kingdom (UK).
By Salifu B.B. Moro