Oil Marketing Companies (OMCs) with the highest-priced fuel on the downstream petroleum market have issued new prices effective 6pm on Sunday and will last until the end of the month before a new review will be implemented on November 1, 2022.
Per notices sighted by Newscenta.com, OMCs with the highest-priced fuel have increased the price of a litre of petrol from GH₵11.10 to GH₵13.10.
In the same vein, the OMCs with the highest-priced fuel has also increased the price of litre of diesel from GH₵13.99 to GH₵15.99.
Competition for market share will account for variance in the rate of increases at the pump, across various OMCs.
A significant fall in the value of the cedi against the US dollar and the sharp rise in petrol and gasoil diesel prices on the global market caused the rise in fuel prices.
The price of fuel in Ghana is determined by a formula that takes into consideration the following factors such as the world market price of each petroleum product; the cost of importing or producing the product and making it available for loading to retail outlets at the storage depot (referred to as the Suppliers’ Premium); the Ghana Cedi (GHS) to US Dollar (USD) exchange rate; the taxes/levies on each petroleum product; and the distribution margins on each product.
In Ghana, there are two pricing windows in a month (1st – 15th and 16th to end of the month) within which both the Bulk Import Distribution and Export Companies (BIDECs) and Oil Marketing Companies (OMCs)/Liquefied Petroleum Gas Marketing Companies (LPGMCs) generally review the prices of petroleum products.
The prices of petroleum products on the world market and the daily exchange rate change are used.
However, because of the bi-weekly pricing window policy practiced in Ghana, the daily prices on the world market are averaged for a two-week period and used in the pricing formula.
The world market prices and the exchange rates used in the pricing formula to determine ex-pump prices in Ghana vary for every pricing window due to the daily changes mentioned above.
In view of this, the ex-pump prices in Ghana change in response to the level of changes in these components of the pricing formula.
Thus, when prices on the world market rise, it leads to increases in ex-pump prices in Ghana and vice versa.
The depreciation of the Ghana Cedi (GHS) against the US Dollar (USD) also results in increases in ex-pump prices.