Image credit: Imaginechina/Corbis
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The Executive Director of the Institute for Energy Security (IES) Paa Kwesi Anamoah Sakyi, has warned that until the cedi stabilizes, fuel prices at the pump will continue to rise. He made this comment shortly after it was reported earlier this week that fuel pumps showed prices had increased to GHc5.18 and GHc5.14 per litre for diesel and petrol respectively.

It will be recalled that prior to the fuel price increment yesterday, IES had rightly projected an impending increase in the month of September which they largely attributed to the depreciation of the cedi coupled with increase in final products of gasoil and gasoline.

Mr. Sakyi also noted that Bulk Oil Distributors who purchase crude oil from the world market will necessarily have to pass on the increasing cost of fuel to Ghanaians.

“When there is a change, or the dollar is stronger than the cedi, then it means that you need more cedis to source for your products. In the last two weeks or more, the dollar was just around 4.7, but it has moved to 4.95; a depreciation of 4 percent,” Mr. Sakyi stated.

The recent fuel price increment has been met with varied reactions. For the most part, many have expressed worry and displeasure about the price increase. Speaking on the fuel price hike, the CEO of the Chamber of Bulk Oil Distributors, Senyo Hosi, has reprimanded policymakers for being myopic and narrow-minded when addressing the impact of oil prices on citizens, noting that issues in the oil business ought to not be tackled in isolation.

“So you should start asking, from a policy perspective, how do I deal with the impact that fluctuating petroleum prices can have on the daily lives of our people and that is where politicians have unfortunately just failed,” Mr. Hosi stated.

Related: Drivers Lament Ghc5 Fuel Price Increase

Even though the Ghana Private Road Transport Union (GPRTU) has no plans of increasing fares (principally because of an earlier agreement reached with the Ministry of Roads and Transport), they are concerned their members will be adversely affected; GPRTU has thus requested that government intervenes to help reduce the impact of fuel price hikes on its members.

In a recent interview, the Chairman of GPRTU, Kwame Kumah, opined: “it is not good for us every day to wake up and hear that the fuel prices have gone up… every day getting up and hearing that fuel is going up; it won’t go well for us.” He pleaded with government to “do something about it that will help us” and requested that government “…stabilize the [fuel prices] for us.”

The reality is that price increment at the pumps typically has a rippling effect on the economy, businesses and homes. This usually translates into increases in prices of consumables and other services coupled with the fact that salaries of employees remain the same. This means workers will generally have to spend more on goods and services; rising cost of living breads hardship among the citizenry, the more reason why it is expedient that government puts in place robust mechanisms to lessen the impact of price hikes on the citizenry and the economy as a whole.