The Cedi Is Ghana’s Biggest Fuel Subsidy – Afrobarometer Analyst Explains Why

Afrobarometer data analyst, Alfred Appiah, has explained why Ghana has not witnessed a massive spike in fuel prices despite facing two oil shocks in recent years triggered by wars.

In a detailed analysis shared on his Facebook page, Appiah noted that Ghana, like other countries around the world, has now faced two oil shocks triggered by wars in recent years Ukraine in 2022 and Iran in 2026 with both wars coincidentally beginning in February.

He explained that in the seven months following each war’s outbreak, Brent crude averaged 41% above its February price in 2026, compared with 12% in 2022.

Yet, he revealed that petrol prices in Ghana rose by an average of 29% this year, compared with 36% in 2022. Diesel rose by 33%, against 62% in 2022.

According to him, the difference is the cedi.

In 2022, it took an average of 19% more cedis to buy a dollar, and by November, the amount had more than doubled. This year, the cedi has moved by about 4%. We import fuel in dollars, so when the cedi depreciates, every litre becomes more expensive in cedi terms, Appiah wrote.

He further explained that diesel was hit hardest in 2022 because its world price rose faster than petrol’s, as Europe had lost access to Russian diesel supplies, while the falling cedi made the increase even more painful.

Appiah projected that if the cedi had continued depreciating at the pace recorded between 2020 and 2024, petrol would cost about 25 cedis per litre today and diesel about 27 cedis.

He concluded that while government relief measures help, the biggest fuel subsidy is a well-performing cedi.

Government relief measures help, but the biggest fuel subsidy is a well performing cedi, he stated.

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