General News of Tuesday, 17 February 2015
Source: Graphic Online
The National Petroleum Authority’s (NPA’s) projection to pay off the Ghc412million debt owed to the bulk oil distribution companies (BDCs) is under threat because of the rising prices of oil on the international market.
After a steady fall from $133 per barrel in July 2014 to about $46 per barrel in the first week of February 2015, representing a decrease of 59 per cent, the price of the commodity has begun to rise again.
According to energy watchers, if the trend continues, the NPA would be unable to pay off all debts owed the BDCs as it earlier projected.
Crude oil price had risen from $46 a barrel to $52 a barrel by close of business on Friday, February 13, 2015, representing 13 per cent increase, threatening the level of windfall expected to lower crude oil prices.
Last year when the price of oil reduced on the global market, the NPA declined to reduce the prices of petroleum products on the local market.
Rather, it maintained that it would use the windfall from crude oil prices to pay off a debt of Ghc412million owed to BDCs.
In a press statement issued by the NPA in January 2015 to announce a 10-per cent reduction in fuel prices, the regulator indicated that it would maintain a balance position to give the consumer a reduction while maintaining a commitment to paying the debt owed the BDCs.
Earlier statements by the NPA had projected that if oil prices remained the way they were, the windfall obtained from such low prices could finish paying off the debt owed the BDCs by end of February 2015.
This was when crude oil was hovering around $46 per barrel as of December 2014.
If the end of February date is anything to go by, then the recent steady rise in global oil prices could throw the completion date out of control.
Refined petroleum products (diesel and petrol) on the world market equally increased by 11 per cent between February 1 and 13, 2015.
The cedi and dollar exchange rate monitored from the Central Bank has also shown depreciation of about two per cent since February 1, 2015.
The exchange rate and the price of fuel on the world market are key determinants for NPA in deciding the prices of fuel.