Local Fuel Market Performance
Price of fuel on the local market remained stable within the window under review. Within the first Pricing window of July 2021, the majority of the Oil Marketing Companies (OMCs) maintained their prices of Petroleum products at the pump. The national average price of fuel per litre at the pump is still pegged at Gh¢5.97 for both Gasoline and Gasoil.
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For this Pricing-window, Zen Petroleum, Benab Oil, Cash Oil, Goodness Oil, Top Oil and Frimps Oil sold the least-priced fuel on the local market according to the IES Market-Scan.
World Oil Market
For the window under assessment, international benchmark, Brent crude price averaged about $74.98 per barrel mark representing a 1.35% increase from the previous window’s average price of $73.98 per barrel mark.
Source: IES Construct 2021, with data from oilprice.com, Bloomberg and Financial Times.
The first pricing window of July saw some volatilities in the price of the international benchmark Brent Crude propelled mainly by the fallout from the OPEC+ meeting at the beginning of the month.
Oil prices were in reverse gear within the period due to the spat from the OPEC+ meeting which had UAE blocking an agreement by the bloc on an increase in production output. UAE’s intention is in response to its request for an increase in its baseline production in direct relation to their investment and upgrade in their production infrastructure. This, they believe is crucial to enable them increase their oil production before demand slumps again.
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The spat caused oil prices to rise above the $77 mark, the highest since 2018.
The strong signs of a demand recovery in Asian markets from particularly China and India also influenced the price increments in this window coupled with the bullish report from the US Energy Information Administration of an increase in US Gasoline consumption.
Gasoline and Gasoil prices as monitored on Standard and Poor’s global Platts platform show that price of the international commodities Gasoline (Petrol) and Gasoil (Diesel) experienced marginal differences within the period. Gasoline saw an increase in price by 2.88% to close the window at $714.77 per metric tonne from an earlier $694.78 per metric tonne in the previous window. Gasoil price also increased by 0.01% to close trading at $597.35 per metric tonne from the earlier window’s price of $597.30 per metric tonne.
Local Forex
Data collated by IES Economic Desk from the Foreign Exchange (Forex) market shows the Cedi depreciated against the U.S. Dollar by 1.39% trading at Gh¢5.85 to the US Dollar from the previous window’s Gh¢5.77 to the US Dollar.
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PROJECTIONS FOR JULY 2021 SECOND PRICING-WINDOW
The 1.35% increase in price of the International Benchmark- Brent crude together with the 2.88% increase in price of Gasoline, the 0.01% increase in Gasoil price and the 1.39% depreciation of the local currency against the US Dollar; the Institute for Energy Security (IES) projects a slight upward adjustment in the price of fuel on the domestic market at the various pumps, particularly for Gasoline (Petrol). The existing competition between the various OMCs will cause many others to however maintain their prices from the previous pricing window.
