Fuel prices may rise marginally by the second-pricing window in June due to international market variables, according to the Institute of Energy Security(IES).
“With the 4.54% increase in price of the International Benchmark- Brent crude, the 1.18% increase in price of Gasoline, the 3.01% increase in Gasoil price and the stability of the local currency against the US Dollar; the Institute for Energy Security (IES) projects for price of fuel on the domestic market at the various pumps to rise marginally,” the IES said in a review of the first pricing window in June.
The current national average price of fuel per litre at the pump is still pegged at Gh¢5.78 for both Gasoline and Gasoil.
However, the Institute of Energy Securities believes some Oil Marketing Companies may decide to maintain prices from the previous pricing window to increase market share.
The price of fuel on the local market remained stable within the first-pricing window.
Below is the full statement
Local Fuel Market Performance
Price of fuel on the local market remained stable within the window under review. Price of petroleum products within the first Pricing-window of April 2021 saw the Oil Marketing Companies (OMCs) maintain prices at the pump throughout the period. The current national average price of fuel per litre at the pump is still pegged at Gh¢5.78 for both Gasoline and Gasoil.
For this Pricing-window, Zen Petroleum, Benab Oil, Cash Oil, Goodness Oil, Top Oil and Frimps Oil sold the least-priced fuel on the local market according to the IES Market-Scan.
World Oil Market
For the window under assessment, international benchmark, Brent crude price averaged about $71.10 per barrel mark representing a 4.54% increase from the previous window’s average price of $68.01 per barrel mark.
Source: IES Construct 2021, with data from oilprice.com and Bloomberg
The Brent Crude price experienced the usual volatility in the markets within the period experiencing marginal dip at the beginning of the window and rising onward.
Prices have been rising in response to the OPEC+ decision to stick to its planned rollout of oil supply to the market in response to the projected increase in demand in the coming months.
The International Energy Agency’s bullish outlook for crude demand by next year in its latest report also shaped market sentiments forcing prices to rise above the $72 per barrel mark.
The increase in demand for fuel is expected as road traffic in the US and most parts of Europe reach the pre-pandemic levels and more likely as summer approaches with its expected increase in travels and movements.
The existing bearish outlook for oil prices is influenced by the demand-supply imbalance on prospects of the Iranian supply to the market as negotiations continue on reversing sanctions imposed on the oil-rich nation by the US in the 2015 Nuclear deal.
Also influencing this outlook is the risk of a demand reduction in parts of Asia and Latin America as they grapple with the third wave of rising COVID-19 infections which is expected force restrictions on movement, hampering fuel demand.
Gasoline and Gasoil prices as monitored on Standard and Poor’s global Platts platform show that price of the international commodities Gasoline and Gasoil experienced marginal differences within the period. Gasoline saw an increase in price by 1.18% to close the window at $671.45 per metric tonne from an earlier $663.60 per metric tonne. Gasoil price also increased by 3.01% to close trading at $576.89 per metric tonne from the earlier window’s price of $560.00 per metric tonne.
Data collated by IES Economic Desk from the Foreign Exchange (Forex) market shows the Cedi maintained its stability against the U.S. Dollar still trading at Gh¢5.77 to the US Dollar.
PROJECTIONS FOR JUNE 2021 SECOND PRICING-WINDOW
With the 4.54% increase in price of the International Benchmark- Brent crude, the 1.18% increase in price of Gasoline, the 3.01% increase in Gasoil price and the stability of the local currency against the US Dollar; the Institute for Energy Security (IES) projects for price of fuel on the domestic market at the various pumps to rise marginally. However, driven largely by competition among OMCs to increase their market share, prices at some pumps may remain stable we continue into the second Pricing-Window of June 2021.
Research Analyst, IES
Source: Ghana/Kasapafmonline.com/102.5 Fm