Fuel prices inched up by 19.4% in 2017

Fuel prices have gone up by an average of 19.4% this year, driven by depreciation of the cedi and rising prices of crude oil, as well as prices of finished petroleum products on the world market.

Last year ended with a litre of petrol selling at an average price of GH¢3.79 while the average price of diesel was GH¢3.75

The average price of crude oil in 2016 was $55 per barrel.

Speaking to The Finder, the Principal Research Analyst of the Institute for Energy Security (IES), Richmond Rockson, said that for 2017, crude oil traded for $63 per barrel as of December, which is one of the highest since June 2015.

19.4% fuel price increase in 2017

He explained that the current average price of a litre of petrol and diesel is GH¢4.49, and this represents an average increase of 19.4% compared to the 2016 figures.

Gallon of fuel costs GH¢20.20

According to him, currently, a gallon of petrol and diesel costs GH¢20.20, compared to GH¢17.05 per a gallon in 2016.

He noted that the increases were mainly fuelled by exchange rate depreciation, prices of finished products, and rising crude oil prices.

Breakdown of pricing mechanism

Rockson explained that in calculating fuel prices, crude oil constitutes 20% of the pricing mechanism, exchange rate makes up 30% of pricing, and the finished product constitutes 50% of the pricing.

The Principal Research Analyst of IES noted that the cedi ended 2016 at GH¢4 to $1, but 15% depreciation in 2017 has moved the exchange rate to GH¢4.62 to $1.

7 Pesewas PSRL reduction on diesel and LPG

Government recently reduced the Price Stabilisation and Recovery Levy (PSRL) on diesel by seven pesewas per litre from the current 10 pesewas to three pesewas.

In the same vein, the PSRL on LPG was reduced by seven pesewas per kilogramme from 10 pesewas to three pesewas.

2.5% drop in Special Petroleum Levy in 2017

The government, in its 2017 budget, reduced the Special Petroleum Tax from 17.5% to 15%, and went ahead to scrap the excise duty on petroleum products.

Without these interventions, Ghanaians would have been paying more for fuel than the current fuel prices.

Data from IES in the 24 pricing windows in 2017 has been analysed.

January pricing window – 7.27%

In January, the prices of petroleum products went up by 7.27%, comprising 4.75% increase in the first pricing window, and 2.52% increase in the second pricing window.

February – 3% increase

Prices remained stable in the first pricing window in February while the second pricing window witnessed a 3% increase.

March – 6% increase

In March, the first pricing window saw a marginal increase of between 1.18 and 2.6% while increases ranging from 2.69% to 4.56% were effected in the second pricing window.

April – 1.5% drop in prices

In April, the prices of petroleum products decreased by 1.5% in the first window while there was no price change in the second window.

May – 1.7% increase

For the month of May, prices went up marginally by 1.7%, made up of 1.03% drop in the first pricing window and 2% increase in the second pricing window.

June – 3.23% increase

June recorded 3.23% increase in prices as prices went up by 4% in the first window and 0.77% drop in prices in the second window.

July – 1.31% drop

The first pricing window in July recorded 1.31% drop in prices, but there were no price changes in the second window.

August – 6.07% increase

The two pricing windows in August cumulatively recorded 6.07% increase, comprising 4.48% increase in first window and 3.55% rise in the second window.

September – 9.57% increase

Cumulatively, September witnessed 9.57% increase in prices, with first window recording 3% increase and 6.57% increase in second window.

October – no increase

The figures for the first pricing window are 1% drop in petrol and 1.51% increase in diesel while the second window recorded 1.02% drop in prices.

November – 5.9% drop

Prices were stable in the first window, but it went up by 5.9% in the second window.

December – No price change

The 7% reduction in the PSRL stabilised prices for December.

The Finder