Local Fuel Market Performance The local fuel prices recorded an average drop of 1.03% on Gasoline and Gasoil combined, during the first 15-days of the month of May 2017. Shell, Total, Goil, Puma, Lucky Oil, Allied Oil and Frimps Oil were among the few Oil Marketing Companies (OMCs) to effect price drops at the pump over the past weekend due to competition for market share.
IES MarketScan indicates that the average price per litre for Gasoline and Gasoil is Ghs3.94 and Ghs3.90, and that Frimps Oil and Puma Energy are selling the cheapest fuel on the local market.
World Oil Market Prices
Indices Benchmark Brent crude prices have been falling virtually every day for the past 15-days, pushing average Brent crude price from $52.97 per barrel to $50.17 per barrel.
OPEC’s production cuts agreed in December 2016 which had pushed oil prices up earlier in the year was not sufficient to keep oil prices high.
Today U.S. oil production is increasing again, boosting supply and keeping prices in check. The international Gasoline and Gasoil prices published by Platts on Friday 12th May 2017 were $510.28 per metric tonne and $432.60 per metric tonne respectively; suggesting a 7.99 percent drop for both fuels. These reductions were influenced by the rise in global stock of Gasoline and gasoil.
Local Forex and Fuel Stock
The Ghana Cedi recorded a slim drop against the U.S. Dollar by closing at Ghs4.22 from the opening of Ghs4.18, for the period under discussion. Stock of fuel held in-tank at the close of the first Pricing-window indicates a sharp drop when compared to the previous window. Gasoline declined from 126 million litres to 98 million litres, while Gasoil stock fell to 174 million litres from an opening stock of 217 million litres.
PROJECTIONS FOR MAY 2017 SECOND PRICING-WINDOW
With crude oil price falling by over 5%, Gasoline and Gasoil prices dropping by approximately 8%, fuel stocks capable of meeting over 4-weeks of national demand, and the Ghana cedi remaining fairly stable against the U.S. Dollar; consumers can expect to get a break at the fuel pump.
The Institute for Energy Security (IES) can expect Oil Marketing Companies to reduce their prices further in the second Pricing-window, after Goil, Shell, Total and a few others kick-started the reductions over the weekend.
Signed: RICHMOND ROCKSON
Principal Research Analyst, Petroleum Unit – IES