Fuel prices set to drop nationwide from June 16

Fuel prices in Ghana are projected to decrease across petrol, diesel, and LPG for the second pricing window of June, according to the Chamber of Oil Marketing Companies (COMAC).

Projected Prices and Reductions

- Petrol:Expected to see the largest decline, falling by up to9.31%. If fully implemented by oil marketing companies (OMCs), the price could drop to approximatelyGH¢14.72 per litre.

- Diesel:Projected to sell aroundGH¢17.02 per litrefor OMCs procuring products on credit from Bulk Oil Distributors. The reduction margin is smaller due to the complete removal of the government-industry intervention mechanism.

- LPG:Expected to decrease marginally to aboutGH¢17.20 per kilogram, influenced by current tender arrangements.

Industry players noted that the price drops would have been larger if not for a2.45% depreciation of the cedi, which weakened from GH¢11.59 to GH¢11.80 per US dollar during the pricing period.

NPA Sets New Price Floors

The National Petroleum Authority (NPA) has lowered the mandatory price floors for the June 16–30 window, directing all OMCs to comply:

- Petrol Floor:Reduced from GH¢15.20 toGH¢13.39 per litre.

- Diesel Floor:Reduced from GH¢15.49 toGH¢15.11 per litre.

Due to market competition, industry observers expect major players like GOIL and Star Oil to price their products close to these minimum limits.

Factors Driving the Decline

The price reductions are primarily attributed to falling international crude oil and refined petroleum product prices:

- International Market Drops:On the global market, LPG prices fell by19.94%, petrol by15.21%, and diesel by10.17%.

- Crude Oil:Decreased by roughly12%, falling from about $110 to$97 per barrel. This decline is driven by weaker imports from China, record-high US oil exports, and ongoing releases from the International Energy Agency's (IEA) strategic petroleum reserves.

Reports of a new agreement to end the Middle East conflict suggest that crude oil prices could decline further in upcoming pricing windows.