The second Pricing-window for the month of August 2016 closed with the local oil market recording an average price drop of 1.27% and 1.10% for Diesel and Petrol respectively., says the Institute for Energy Security (IES).
IES says the hike is in sync with market fundamentals coupled with the battle for market shares among the Oil Marketing Companies (OMCs).
Today in average terms, Diesel and Petrol is sold on the local market at GHS3.377 per Litre and GHS3.474 per litre respectively. Radiance Oil, Petrobay, Glory Oil, Engen, Puma Energy, SO Energy, Frimps Oil, Agapet, Petrosol, and Top Oil; were captured on the IES Top-10 Chart as the OMCs selling the cheapest Petrol on the market.
World Petroleum Market Indices
The average Platts prices rose from $439.74 to $492.34 (12%), and from $369.50 to $425.16 (15%) per metric ton for Petrol and Diesel respectively at the close of the second Pricing-window for the month of August 2016; snapping five consecutive Pricing-windows of price losses on account of refiners delaying to switch to Winter-grade Gasoline production amid rebound in Asian fuel demand.
In a similar manner, the average price of Brent crude rose 5.63 dollars or 13 percent to $49.45 a barrel; almost eroding the falls in prices from the previous five pricing sessions.
The rise in crude prices could be attributed to speculation of an OPEC output freeze with non-OPEC oil producers at a meeting in Algeria on September 26 – 28, the possibility of stormy weather in the U.S. Gulf of Mexico which could disrupt production, and the military tension in the northern Gulf.
Local Market Index and Fuel Stock
Over the last two weeks, the Ghana Cedi have remained relatively stable against the U.S. Dollar, according to data from the Bank of Ghana. Also the combined national stock for Diesel and Petrol fell from 482 million litres to 395 million litres as importers remain wary of bringing in additional cargoes, especially Diesel; in the face of rising world market prices and hoping to draw-down old stocks on account of current prices. Today the Diesel fuel stock held in-tank is less than 118 million litres; incapable of meeting two weeks of national fuel demand.
PROJECTIONS FOR SEPTEMBER 2016 FIRST–PRICING WINDOW
Following the rebound in the global oil market price of both Crude and refined petroleum, decrease in new imports to boost national stocks, and the relative stability of the Cedi against the U.S. dollar; the Institute for Energy Security (IES) can project an increase of between 18 and 20 Pesewas per litre on Petrol and Diesel to reflect developments on both the international and local oil market.
Although the increment of around 6% may be justified, the IES wishes to entreat Oil Marketing Companies and Bulk Oil Distribution Companies not to feed on the desire to make profit on old stocks, and overshot prices way above logical levels.
Also within the first Pricing-window, the Institute for Energy Security foresees another round of Liquefied Petroleum Gas (LPG) shortage on the local market.
GILBERT RICHMOND ROCKSON
Principal Research Analyst, Petroleum Unit – IES