The Chamber of Petroleum Consumers (COPEC) has alerted the public to anticipate higher fuel prices at the pumps in the coming weeks due to the depreciation of the cedi.
This warning follows increases in fuel prices by some oil marketing companies, despite earlier projections that prices would decline from mid-May. The companies have attributed the price hikes to uncertainties in the exchange rate market.
As of Tuesday, May 21, 2024, one US dollar was selling for GH¢15.20 at Forex Bureaus.
The Executive Secretary of COPEC, Duncan Amoah, stated that oil marketing companies are struggling due to exchange rate volatilities.
Mr. Amoah revealed that although some oil marketing companies are exploring innovative ways to minimize the impact of the cedi’s depreciation on their operations, the instability is making it difficult to plan.
“Once you have a currency that you can’t predict its performance in the next two to three months, then you are forcing the importers to determine what values to set their pricing”, he said.
He argued that business owners will always react to market expectations and make their forecasts based on the performance of the currency.
“If the importer is done selling his fuel, he has to pay the suppliers. He needs more cedi than he did when he was setting the price. A certain overrun may have occurred”, he said.
Mr. Amoah stated that importers are burdened with higher costs because they now need more cedis to purchase the same amount of dollars initially used to import the product.
“So clearly, something must be done and government has a duty to ensure stability of the cedi”, he said.
He further indicated that the performance of the cedi and the international market prices of various finished petroleum products have been major factors in determining fuel prices at the pumps.
However, most oil marketing companies decided to leave the prices unchanged since last Thursday due to the cedi’s depreciation.
Another major player in the industry, Allied Oil, informed Joy Business that while they will also review their prices upwards, they intend to keep them below the 14 cedi mark.