Ghana’s fuel deregulation framework is beginning to deliver clearer benefits to consumers as global oil prices decline and the cedi remains relatively stable.
Chief Executive Officer of Petrosol, Michael Bozumbil, says consumers should not expect an increase in fuel prices in the first pricing window of September.
Speaking on Joy News’ PM Express Business Edition on Thursday, he said the company’s assessment of market trends points to price stability, with any reduction still to be determined.
“From where we sit, like you said, the numbers, my team are computing the numbers, but we study the trend, and what I can say with some amount of certainty is that from the standpoint of Petrosol, the consumer should rest assured that prices will not go up.”
“I mean that part, that is what we are seeking, we are looking towards, as to whether it will come down and by what, I mean,” he added.
Mr Bozumbil attributed the current outlook to a combination of international oil prices and the relative stability of the Ghana cedi.
He explained that in previous periods, a fall in international oil prices did not necessarily translate into lower prices at the pumps because of sharp depreciation of the local currency.
“It’s a combination of both, you know. The key factors, international prices and then the cedi stability.”
According to him, the recent strength of the cedi has played a significant role in maintaining fuel price stability.
“But you know that largely the stability of the cedi has contributed, you know, to the price stability in recent times,” he said.
He noted that past episodes of cedi depreciation had forced oil marketing companies to raise prices even as international crude prices fell.
“Anytime international prices even increase and by, or decrease, in the past there’ve been instances where the international prices would decrease, but yet the cedi will, you know, depreciate sharply, and then we will we will be forced to, you know, increase prices on the market, and the consumer will not understand, because I mean they see that prices are coming down, so why?”
Mr Bozumbil said the current stability of the local currency is allowing consumers to directly benefit from favourable movements in international prices.
“But thankfully, with the stability of the cedi, at least consumers now can see the benefits, you know, usually being transferred to them.”
He said this demonstrates the intended benefit of deregulation, where favourable market conditions can be passed on to consumers.
“And that is what the beauty of deregulation is all about, that these benefits can always get to the consumer, so that when the upside comes, the consumer is more willing to accommodate.”
He maintained that both international oil prices and the cedi will remain critical to fuel pricing, but stressed that the local currency’s performance has been particularly helpful.
“So for me, it’s the two factors, but our local currency, the strength of our local currency, has been very helpful.”
