Fuel prices likely to go up following reduced global supply

According to current estimates, the Organisation of Petroleum Exporting Countries (OPEC) controls about 80% of the world’s oil reserves, producing about 30% of the world’s consumption a day.

OPEC is made up of 23 countries but In 2016, when oil prices were particularly low, OPEC joined forces with 10 other oil producers to create OPEC.

This group of 23 oil-exporting countries meets regularly to decide how much crude oil should sell on the world market.

On October 5, 2022, members of  OPEC agreed to cut production by two million barrels per day.

The cut which will take effect from November represents around 2% percent of the global oil supply and is more than initially anticipated.

According to Forbes, many oil & gas stocks have been trending lower since mid-2014, there are suggestions that as the world moves towards clean energy producers of fossil fuel will be affected in the long-term.

This many believe is one of the reasons OPEC is seeking to cut production to drive up the price of crude back up from the $90 per barrel it’s currently selling.

The US has criticized the move and is expected to increase its own production to help the situation, but Duncan Amoah of the Chamber of Petroleum consumers says this may not be enough and Ghanaians should brace themselves to pay higher rates at the pumps.

“Overall, prices are likely to bounce back over the US$100 region with these announcements. What that means for countries like Ghana is simply to get prepared to pay more for oil. Not only that, the persistent depreciation of the cedi together with OPEC is preparing to do will push us into tougher times.”