Business News of Sunday, 10 September 2017
Current developments in the U.S including Tropical Storm Harvey are likely to push the prices of fuel up in Ghana in the second pricing window.
The Institute of Energy Security (IES), has predicted of stable prices in the first pricing window in September.
The Institute attributes this to the relative stable prices for finished products on the international market as well as the suspension of the recently implemented fuel standards.
However, aftermaths of Tropical Storm Harvey are likely to cause a spike in petrol prices.
It is unclear how much percentage increase consumers are likely to see at the pumps in the second pricing window of this month but the National Petroleum Authority (NPA) has predicted of possible price hikes due to Tropical storm Harvey as well as the ongoing summer driving school season in the United States.
Tropical storm Harvey hit the Texas energy hub areas of Houston and Corpus Christi in the United States.
This has forced ten refineries with a total processing capacity of about 2 million barrels a day to shut down.
The refineries that have shut down include Exxon Mobils Baytown refinery which is the second largest refinery in the country, the refinery processes up to five hundred and eighty-four thousand barrels of crude oil a day.
This phenomenon is expected to impact product supply in the US.
Also demand for petrol in the US increases dramatically during the summer driving season, the season which starts in June comes to an end in September.
This is therefore likely lead to a shortfall in meeting demand for petrol prices.
Due to that fact, the determinants of prices in Ghana from 1st to 15th September have already been established.
However, the US demand related petrol price hike if any is expected to impact on local prices from the 16th of September.
Meanwhile, the Executive Secretary for the Chamber of Petroleum Consumers, Duncan Amoah who spoke to Citi Business News has warned of dire consequences on the economy if government does not put the necessary measures in place to absorb the possible shock on the country’s economy.
“If you ask what the net effect will be on Ghanaian consumers, it is to be expected that from next week fuel prices would even go way above what we anticipated and again this is why we called on the government and authorities to kick start the price stabilization margin on fuel pricing”.
He added that government should seek the best interest of businesses and ensure that it can effectively deal with any market shocks.
“We believe that you take the stabilization margin for some of these global shocks that are associated with prices and we think that it is time for government to at least get some money released for importers to be able to cushion them around this time, other than that the net effect on our pump prices could be dire and could be a bit grave for all of us”.