Business News of Friday, 1 December 2017
The prices of petroleum products will remain unchanged at the pumps at least for the first two weeks in December, despite a reduction in the price stabilization and recovery levy.
As a result, the Chamber of Petroleum Consumers (COPEC) is urging consumers to disregard reports of reduction in fuel prices due to the development.
The NPA has directed all Oil Marketing Companies (OMCs) to review the prices of their products to reflect a 70% reduction in the price stabilization and recovery levy component of the price build up for diesel and Liquefied Petroleum Gas (LPG).
The decision also follows recent fluctuations in the prices of petroleum products due to strong political and economic influence from oil-producing countries across the world.
But COPEC explains that the absence of any reduction in prices at the pumps is also influenced by the cedi’s depreciation.
“Previous exchange figures of GH¢ 4.56/$1 shot up to GH¢ 4.67/$1 thereby creating a forex differential of some 11p/$1 or some 2.41% within the past two-week window,” it said in a statement on Friday.
COPEC added, “International market prices for the two week window for both white products saw a mixed bag, Gasoil saw an increase of about $3.5 per metric to close trading at around $560.5 per metric from the previous window figures to $557.0metric, gasoline went down by $18 per metric to close trading at $605 per metric.”
According to the Executive Secretary of COPEC, Duncan Amoah, the above situation should have escalated prices of petroleum products but for government’s intervention.
As a result, OMCs are selling their products for 4 cedis 49 pesewas per litre each of diesel or petrol, on the average.
The price stabilization and recovery levy is but one of the eight components of the petroleum price build-up (PBU).
Hence, an impact of its reduction will be felt when ex-refinery prices (the price at which BDCs purchase petroleum products) are declining on the global market.
Meanwhile, COPEC has urged that government reviews the Special Petroleum Tax component to cushion consumers from any shocks from global price fluctuations.
“We commend the government for the timely intervention to arrest further price hikes at the pumps and will urge the government to review the special petroleum tax (SPT) on the price build to bring down fuel prices as the coming year will be a very difficult one for consumers across the country if the current price build-up is left to continue causing any further escalation in fuel prices in the country.
“It is our belief that the fixing of the special petroleum Tax to a specific amount or a movement from the current 15% on Ex-Depot to an Ex-Refinery position as the levels continues to remain very high, accounting for over 47% on current ex-pump prices,” COPEC concluded.
Ex-pump prices remain unchanged
Citi Business News’ checks across some OMCs in the capital on Friday, December 1, 2017, showed that most prices have not been changed.
Some station managers, however, indicated that any review could only be effected unless sanctioned by their respective corporate managers.
Total, GOIL and Shell are all selling a litre of diesel and petrol at 4 cedis 49 pesewas each.
However, Champion Oil is selling a litre each of petrol and diesel for 4 cedis 47 pesewas.