Business News of Friday, 1 December 2017
The National Petroleum Authority (NPA), has directed all Oil Marketing Companies, and LPG Marketing Companies to use revised prices in the Price Stabilization and Recovery Levy Act to control recent price increases in petroleum products.
This follows a directive from the Ministry of Energy, raising concerns about the recent fluctuations in the prices of petroleum products due to strong political and economic influence from oil producing countries across the world.
In line with the directive, the Authority has revised the cost of the levy which is one major component in the determination of petroleum prices.
By this, the Price Stabilization and Recovery Levy for petrol will remain at 12 pesewas per liter, while diesel and LPG are revised to 3 pesewas per liter from 10 pesewas per liter.
According to the Ministry of Energy, “it is conscious of the harsh effects of the upward movement in the price as a result conditions in the international world market.”
It explained that, one of the purposes of the Act is to provide stability for consumers at the pumps in times of raising prices of petroleum products on the international market, hence the move.
IES predicts no fuel price increase
Meanwhile, the Institute of Energy Securities (IES ) had said that Consumers will not experience any significant price change at the pumps in the first pricing window of December 2017.
This, is according to the Principal Research Analyst at the IES, Richmond Rockson, who spoke to Citi Business News.
He explained that despite the fast depreciation of the cedi against the dollar, the effect on petrol prices will be minimal.
“In the next pricing window which is the first pricing window in December, we foresee fuel prices remaining fairly stable, when I say fairly stable what I mean is that, we are not expecting any price change, and even if there will be a change in prices it won’t be significant”.
“The cedi is depreciating at a fast rate even though it is selling around 4 cedis 6 pesewas on the foreign exchange market. The average for the period is 4 cedis 48 pesewas, as compared to the previous average of 4 cedis 41 pesewas”.
He explained that, the depreciation of the cedi would reflect in a price change of less than one percent for petrol, and therefore will be insignificant.
“Virtually a depreciation of 1.5 percent. Crude oil prices have remained fairly stable as well, and the difference is less than one percent,” he said.