Fuel prices to rise by 2% in February – IES

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Prices of fuel may go up by 2 percent in the first pricing window in February, between February 2, 2018 and February 15, 2018.

However, a swift intervention from government through the National Petroleum Authority (NPA)’s price stabilization mechanism could keep prices stable.

The Institute of Energy Security (IES) which revealed this, further attributes the development to the constant rise in crude oil prices which is currently selling at 69 dollars per barrel on the international market, among other factors.

“Crude oil prices have gone up on the international market and it is still rising; as we speak the cost of a barrel of oil is averaging around 69 dollars from a previous average of 67.7 dollars. That’s a rise of about 2 percent. The finished product that’s gasoline and gas oil prices have also gone up on the international market,” Principal Research Analyst at the IES, Richmond Rockson told Citi Business News in an interview.

Consumers have had to pay more at the pumps last month (January 2018), due to rise in oil prices and the cedi’s marginal depreciation.

Currently, a litre each of petrol and diesel is selling at 4 cedis 62 pesewas at some major fuel stations.

Mr. Rockson explained the trend of the fuel price stability to Citi Business News.

“In the first pricing window of December 2017, government reduced the price stabilization recovery levy in the price build up from 10 pesewas to 3 pesewas, that’s a 70 percent reduction. In the second pricing window of December, it moved from the 3 pesewas up to the 7 pesewas. That means the subsidy was just about 3 pesewas. In the first pricing window of January, government applied it to the increment that was supposed to be experienced by consumers. That was just about 4 percent. Most of the OMC’s did not increase prices at the time. But in the last pricing window, it wasn’t enough so prices went up at between 25%,” he explained.

But Richmond Rockson says prices will go up again should government not intervene.

“So in this particular window, for the first pricing window of February if government intervenes in the price stabilization mechanism, then definitely that means prices that are supposed to go up will be absorbed by that levy. If government does not intervene, we are expecting that prices will go up by about 2 percent” he asserted.

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