Business News of Friday, 1 December 2017
The Chamber of Petroleum Consumers – Ghana (COPEC-GH) has said that checks at various pumps indicate no reduction in fuel prices as the marginal increase in the price build-up has been compensated by the marginal reduction in Price Stabilisation and Recovery Levy, keeping the prices stable.
The Energy Ministry recently raised concerns over recent fluctuations in the prices of petroleum products due to strong political and economic influence from oil producing countries across the world.
Subsequently, The National Petroleum Authority (NPA) gave orders to all Oil Marketing Companies (OMCs) and LPG Marketing Companies, to use revised prices in the Price Stabilisation and Recovery Levy Act to control recent price increases in petroleum products.
Per the revised levies Petrol will thus remain at 12 pesewas per litre, while the levies for diesel and LPG have been reduced to 3 pesewas per litre from 10 pesewas per litre.
But COPEC GH has said that: “Pump prices for both products recorded so far however indicate no real movement or change in prices as the otherwise pending increases have been knocked off or curtailed by the new directive from the NPA”.
A press release by COPEC GH Executive Secretary Duncan Amoah on Friday, Dec 1, welcomed the cut “in one of the 10 different levies and taxes in the petroleum price build up” adding it “is timely and commendable though it’s actual impact is expected to be wiped by the otherwise pending increases for the current window”.
Below is the full statement by COPEC GH:
CHAMBER OF PETROLEUM CONSUMERS-GHANA
NO REDUCTION IN FUEL PRICES
PUMP PRICES REMAIN UNCHANGED
REPORTS OF 70% REDUCTION MISLEADING
The first fuel pricing window under the Price Liberalization Programme of the National Petroleum Authority (NPA), for the month of December 2017, commenced today with most Oil Marketing Companies maintaining pump prices.
The immediate past window of the month of November saw pump prices increase by between 4-8% for both petrol and diesel whiles LPG also went up by some 7.32% depending on the OMC or LPGMC.
Most OMCS moved up from 4.320 and 4.230p/litre for both petrol respectively to 4.490/litre for both products, petrol saw averagely 4.01% whiles diesel also saw 6.13% increases averagely.
Average trading prices per litre for both petrol and diesel prior to this current window continue to remain at around 4.490/litre as of today.
There was an industry wide expectation of some further 1-2% increases in pump prices for this new current window starting today as a result of the abysmal performance of the country’s currency to the dollar.
Previous exchange figures of ghc4.56/$1 shot up to ghc4.67/$1 thereby creating a forex differential of some 11p/$1 or some 2.41% within the past two week window.
International market prices for the two week window for both white products saw a mixed bag, Gasoil saw an increase of about $3.5/metric% to close trading at around $560.5/metric from the previous window figures to $557.0/metric, gasoline went down by $18/metric to close trading at $605/metric.
The exchange losses and International price movements were expected to further increase or impact pump prices by between 1-2% for the current window until the announcement by the NPA of scaling down on the stabilisation levy for diesel and LPG.
This new directive from the National Petroleum Authority’s for a drop in one of the 10 different levies and taxes in the petroleum price build up (price stabilisation and recovery levy) is timely and commendable though it’s actual impact is expected to be wiped by the otherwise pending increases for the current window.
The stabilisation levy meant to cushion consumers in times of shocks and high prices until this current directive was 12p/litre for petrol and 10p for diesel and LPG.
Per the new directive, PSRL has seen a reduction of 7p/litre on both diesel and lpg whiles the 12p/litre on petrol remains same and unchanged due to the$18 gain on the international market for PMS.
This will have had a net impact of some 1.3% reduction on diesel and LPG whiles petrol will have zero.
This also would have meant a price of a gallon currently averaging around 20.204 for PMS (petrol) and Ghc20.204 for AGO (diesel) across most pumps would have seen a net reduction by 1.53%. to close trading at ghc19.89/gallon for both products.
Pump prices for both products recorded so far however indicates no real movement or change in prices as the otherwise pending increases have been knocked off or curtailed by the new directive from the NPA.
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 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 Ex-Refinery position as the levels continues to remain very high, accounting for over 47% on current ex pump prices,
Per the current mix and the nature of the existing price build up, any future shocks on world market prices or the forex in the coming weeks will likely have a very negative impact on the already soaring pump prices and consumers eventually.
We further implore on the Government to set up a bi-partisan parliamentary enquiry into the recent pre-mix fuel diversion scandal to unveil and prosecute the criminals engaged in this practice to deprive the fishermen of the needed products and eventual blending sale of same to unsuspecting consumers across the country.