The National Petroleum Authority (NPA) has attributed the rise in fuel prices to the dramatic depreciation of the local currency against the US dollar.On Monday, October 17, 2022, some oil marketing companies adjusted their prices upwards, selling petrol and diesel for GH¢13.10 and GH¢15.99 per litre, respectively.

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 The upward adjustments represent more than a 10% increment from the last pricing window, with diesel and petrol then selling at an average GH¢11.05 and GH¢13.98 respectively.

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 Explaining the correlation between the exchange rate and the prices of petroleum, the Head of Economic Regulation at NPA, Abass Tasunti, stated that the high exchange rate is affecting the prices of fuel at the international market as well as the cost of importation.Speaking in an interview, he said, “the cedi is a major problem.

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The most volatile items in there in determining the ex-pump prices are the exchange rate and the world market price. We are really exposed to the exchange rate, which has continuously depreciated.”“The rate also affects the supply of the product because if the cedi is not available and the BDCs bring the product, they will not be able to pay the suppliers, and we will have challenges.

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Availability of the dollar is key,” Mr Abass Tasunti added.The increase in fuel prices directly affects transport fares and indirectly affects the prices of basic commodities.After the announcement of the new price window at the pumps, the Ghana Private Road Transport Union (GPRTU) is demanding a 40% increase in transport fares.The situation could exacerbate the plight of citizens in an already burdened economy.

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As such, scores of Ghanaians have called on the NPA to regulate and stabilize fuel prices.  Responding to the call, the NPA has stated that the authority is not mandated to determine or stabilize the price of petroleum products at the pump.Absolving itself of blame, NPA has asked the Bank of Ghana and the Economic Management Team to take immediate steps to halt the fast decline of the Cedi against the US Dollar to stabilise fuel prices.

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 Cedi depreciation Currently, the local currency is sold at GH¢12.45 to the US dollar at the forex bureaus or the retail market.As of October 14, the Ghana cedi lost 9.03% in value to the US dollar.In the latest report by Bloomberg, the cedi has been ranked as the world's worst-performing currency after Sri Lanka's rupee among 150 economies tracked.

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Meanwhile, the energy think tank, Institute for Energy Security (IES) is predicting a shortage of widespread petroleum products across the country.According to IES, the scarcity of dollars and depreciation of the cedi, which has eroded some working capital of the Bulk Oil Distribution Companies are the reasons that will trigger the shortage.Source: The Independent Ghana |

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