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Petroleum price increases justified

7782745477898_3413701137165The Chamber of Petroleum Consumers (COPEC) has blamed the continuous fall of the cedi against the dollar for the recent price hikes of fuel at the pumps.

According to COPEC, the situation has resulted in speculations leading to an increase of about 4 to 10 percent in fuel prices.

Also, Oil Marketing Companies (OMCs) in the country have justified the continuous increases in prices of petroleum products this month.

The deregulation of the downstream petroleum sector allows OMCs to review prices of petroleum products every two weeks. This have seen the prices of petroleum products adjusted upwards leaving consumers to wander in the midst of unfavorable economic situations in the country.

Since the beginning of the year, prices are being reviewed every week. Prices of petroleum products increased between 8 and 11 percent within the first week of January.

This was also followed by an increase of between 4 and 10 percent last week. The situation has lead to agitations and a huge outcry from consumers.

The Chief Executive Officer of the Association of OMCs, Kwaku Agyemang-Duah  justified the increases, arguing that, the increases are due to the cedi depreciation as well as a drop in production of crude by OPEC members, making the products scarce and expensive. “Basically the foundation of fuel prices is from the world prices and the OPEC and non OPEC countries have decided to cut down their inventories in production leading to a decline in supply and increase the prices. Also, the cedi depreciation has not been favourable between November and December.”

Mr. Agyemang-Duah, speaking at the opening of two new Total Stations, denied reports they are exploiting consumers with the margins of increase in petroleum prices.

“There is no way we are exploiting, the competition is so fierce even when price is not changing; because of competition the price gets lowered one way or the other. As we speak, the price for diesel for instance is at 3 cedis 99 pesewas average but some people are selling it at 3 cedis and 3 cedis 5 pesewas so there’s no way OMCs can exploit.”

The buffering situation to consumers are that, the recent hikes comes a number of days after the Finance Minister nominee Ken Ofori Atta said consumers would experience an immediate halt in the increase of utility and fuel prices in the short to medium term, adding that government is determined to bring immediate relief to consumers thus hikes in utility as well as fuel prices will not take off any time soon.

“We will have to examine our energy mix and I think that we are likely going to get a little bit more from gas which will then help us and give us a chance to breath from that so I don’t expect us to be increasing prices of ECG and fuel we are looking to see how we can as we promised to bring some relief to Ghanaians as we promised”.

In a related news, Ghana’s leading oil marketing company, Goil, has denied allegations that it was being funded by government to subsidise its petroleum products.

According to the group CEO, Patrick A. K. Akorli, government shares in Goil has declined from 51% to 30%, adding that the government is rather owing the company.

He also noted that the company is not making any losses by maintaining the price of its petroleum products compared to other Oil marketing companies (OMC).

In a press dialogue organised by the chamber of petroleum consumers (COPEC), Chief operating officer, Alex Andzew also explained that the increment by other oil marketing companies is due to the cedi depreciation and some international regulations.

He added that Goil observes the market for a while before pegging the price of its products.

Source: http://spynewsagency.com/2017/01/petroleum-price-increases-justified/

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