OMCs Set To Reduce Fuel Prices Significantly in 2023

The Institute of Energy Securities (IES) forecasts that oil marketing companies (OMCs) will dramatically lower fuel prices in the first week of 2023, with some selling at single digits.

The projection is based on the prices of gasoline and LPG falling by 5.28 percent and 5.09 percent, respectively, and the Cedi strengthening by 26.5 percent versus the US dollar in the second pricing window of December.

In its first pricing window published in January 2023, the energy research group claims that:

“Despite the marginal rise in the price of Gasoil on the international market, the Ghana Cedi’s appreciation against the Dollar will force prices down locally.”

“Prices are, therefore, set to reach Gh¢9.50p and Gh¢11.60p per liter for Gasoline and Gasoil respectively, and Gh¢9 per kilogram for LPG in the coming days,” the institute added.

Local Fuel Market Performance

International market price declines and an increase in the value of the Ghana Cedi relative to the US Dollar during the second pricing window of December 2022 had a positive impact on the domestic fuel market at all Oil Marketing Companies (OMC) outlets that the Institute for Energy Security was observing (IES).

To that effect, the national average price per liter of gasoline is now Gh12.68 from Gh15.16 due to price decreases across the pricing window, a 16.36% decrease over the time period.

According to Fritz Moses, Research Analyst, the national average price of gasoline dropped from Gh18.78 to Gh15.55 or around 17.20%.

The OMCs with the most expensive gasoline on the market in the pricing window under consideration were Nasona, Shell/Vivo, Total Energies, Engen, Sel, and Goil, according to the IES MarketScan.

Some of the OMCs with the cheapest fuel on the market were identified as Star Oil, Frimps, Benab Oil, Zen Petroleum, and Goodness Oil.

World Oil Market

Brent, the international benchmark for crude oil, lost 0.51% of its value from the average price of $81.90 per barrel during the last window to the current average price of $81.48 per barrel.

In light of this, Moses said: “With Beijing making the most significant adjustments to its stringent Covid-19 rules, including easing testing requirements and travel restrictions, a slowing worldwide economy, China’s recent lockdowns, and a stronger dollar have brought the price of oil down more than 23% in the last six months.”

Oil prices increased on Friday, despite concerns that an impending Arctic storm across the United States will stifle the growth in demand for transportation fuels this holiday season.

Expectations of decreased Russian oil exports from the Baltic region in December helped to offset this.

The concern that winter storms across the United States are impacting the logistics and production of petroleum products and shale oil, however, kept prices from modestly declining within the window.

World Fuel Market

Meanwhile, the price of gasoline continues to decline over the time under review, falling by 5.28% from $763.10 per metric tonne to $722.84 per metric tonne, according to the global Standard & Poor’s (S&P’s) Platts averages observed over the most recent pricing window.

From $891.30 per metric tonne to $901.23 per metric tonne, the price of gasoline increased 1.11%. In addition, the price of LPG dropped by 5.09%, from $572.58 per metric ton to $544.23.

Conclusion

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