The Former Chief Executive of the National Petroleum Authority (NPA), Alex Mould, is predicting a 20% reduction on prices of petroleum products beginning April 1, 2020.
According to him, “per the daily price indicators used for the Petroleum Price Build-Up (PBU) and published by the NPA, we have seen world crude oil prices dropped from $540/ton (t) in March 1 to $212/ton (t) which translates to a drop of 60%.”
“Going by these PBU indicators and the methodology used to derive
them, we expect petrol prices to go as low as GHS GHS4.00/litre.
“This price can go down even further with Government interventions in the form of tax breaks” he noted in a press statement.
The Finance and Energy Expert said the challenge faced by the current
season provide a responsibility for the the overnment to quickly visit
“win-win” opportunities to alleviate some of the financial burdens on
Read Full Statement
As the lockdown to combat the spread of the coronavirus is now in
effect, Ghanaian families and businesses will have to reset. A domino
effect on our economy caused by the pandemic is expected to bring about
challenges such as loss of income, business, increase in the costs for
goods and services, and other factors impacted by increased
The challenges of the current season provide a responsibility to
quickly visit “win-win” opportunities to alleviate some of the financial
burdens on all Ghanaians – April 1st presents a “no-brainer” opening to
reduce the cost of petrol at the pump.
Petrol is at its lowest price since the 1990s – $0.38/gallon
wholesale from U.S refiners and Wholesalers. With this in mind, Ghana
should expect a drastic drop of up to 20% in petrol prices on April 1st.
Petrol is currently imported into Ghana for less than $0.24/litre or GHS 1.40/litre (based on FX rate of GHS5.85 GHS/USD).
The daily price indicators used for the Petroleum Price Build-Up
(PBU) as published by the National Petroleum Authority (NPA) are as
– 1st March: $540/ton (t)
– 16th March: $434/ton (t)
– 1st April: $212/ton (t)
This translates to a drop of 50% from 16th March and a 60% drop from 1st March.
Going by these Price Build-Up (PBU) indicators and the methodology
used to derive them, we expect petrol prices to go as low as GHS
GHS4.00/litre. This price can go down even further with Government
interventions in the form of tax breaks.
From the PBU, the taxes and distribution costs of petrol are
GHS1.50/litre and GHS1.10/litre respectively (or GHS 2.60 combined);
which represents about 65% of the pump price of petrol.
This makes Ghana one of the highest-taxed countries with respect to petrol.
I am reliably informed that Government is being advised to seriously
contemplate removing the nuisance “Special Tax” (GHS0.46/litre) and the
outdated “Price Stabilization” levy (GhS0.16/litre). If done, we could
see prices fall even lower than the expected GHS 4.00/litre to below GHS
Enacting these very doable reductions would be a relief to so many –
remembering that nearly 80% of our population constitutes key workers
who, in serving the public will have to embark on alternate (and more
expensive) transportation means to keep themselves safe, as per social
· Note: a US Gallon is 3.875 litres whereas a UK Imperial Gallon – what is used in Ghana – is 4.5 litres.
· PBU is agreed to by all the players in the value chain – (Chamber
of Bulk Distributors (CBOD), Association of Oil Marketing Companies
(AOMC), Tanker Owners, and Tanker Drivers; collectively the sector