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OMCs predict fuel price surge in next pricing window amid global oil pressures

By Evans Effah
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3 min read
OMCs predict fuel price surge in next pricing window amid global oil pressures

12 Jan 2015, Nantong, Jiangsu Province, China — A Chinese worker holds an oil nozzle at a gas station in Nantong city, east China’s Jiangsu province, 12 January 2015. China’s crude oil imports rose above 7 million barrels per day for the first time in December, reaching record levels as plunging international prices allowed the world’s largest importer to fill strategic and commercial reserves. International crude prices are near six-year lows, revisiting levels last seen in the wake of the global financial crisis. While price controls over transport fuels limit the boost to the Chinese economy, the drop has presented an unusual opportunity for China to increase reserves of crude oil at relatively little cost. China imported 7.15 million bpd in December, bringing its full-year crude imports to a record 308 million tonnes up nearly 10 per cent on the year. Some of that additional demand reflects economic growth — Image by © Imaginechina/Corbis

Consumers could face an increase in fuel prices in the next pricing window, the Chamber of Oil Marketing Companies (OMCs) has warned, citing global oil price movements, a weakened cedi, and the potential for fuel hoarding by players in the distribution chain.

Dr. Riverson Oppong, CEO of the Chamber, revealed in an interview with Channel One TV on Tuesday, June 17, that this week’s marginal fuel price drop may be short-lived.

You’re currently benefitting from a reduction this week, but I can’t promise for next week,” Dr. Oppong cautioned, attributing the limited relief at the pumps to a temporary suspension of a GH¢1 tax by the government. Without that intervention, fuel prices would have surged by as much as 9.5%.

He explained that although the local currency showed slight appreciation, global benchmark oil prices have been rising simultaneously, neutralising the expected benefit.

When we got the directive on Saturday that the GH¢1 had been suspended, it brought things to the same level,” Dr. Oppong said. “So they actually buffet at a point.”

As a result, consumers only saw a modest 2% price drop, far less than anticipated.

Looking ahead, Dr. Oppong predicted a definite uptick in prices in the coming week and warned of possible market disruptions due to hoarding.

Next week, two things might happen… You might see BDCs hoarding product waiting for the next window, because for sure it will go up 100%. You’ll even see OMCs hoarding fuel because they want to wait for the next window,” he said.

To mitigate this, the Chamber is engaging stakeholders, including the Chamber of Bulk Oil Distributors (CBOD), to discourage such practices. “But for next window, for sure, things will go up,” Dr. Oppong affirmed.

The fuel price outlook adds to growing public anxiety over pump prices, which have become increasingly volatile due to a mix of international and local economic pressures.

Read Also: 2025 BECE ends today: WAEC commends smooth conduct despite minor hiccups

Meanwhile, the Executive Director of the Institute for Energy Security (IES), Nana Amoasi VII, has urged the government to tread cautiously regarding any new taxes or levies on fuel. He warned that a rushed reintroduction of the GH¢1 fuel levy could damage public trust.

It will be difficult. I am not sure Ghanaians will want to see a government that promised to ensure taxes, levies are reduced introduce one that will immediately increase prices of fuel for them and bring discomfort,” he said.

He advised that any such policy move should be carefully timed with favorable market conditions and a stronger cedi to soften the impact on consumers.

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Evans Effah is an expert in online media and digital journalism, with over a decade of experience in content creation, audience growth, and media relations. Email: evans.effah@mg.com.gh

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