The Chamber of Petroleum Consumers-Ghana (COPEC) is asking government to immediately remove the Price Stabilisation and Recovery Levy on diesel and petrol to forestall the increasing spate of the price of the products.
COPEC is of the view that the surge in the price of the petroleum products, if left unchecked, is likely to continue until year end.
“These marginal increases if left to continue would further worsen the cost of transportation, general goods and services to invariably affect all other productive sectors of the economy and economic life,” it predicted in a statement issued on Thursday, September 16 by Executive Secretary Duncan Amoah.
This comes in the wake of an upward review of the petroleum products in the second half of September.
Refined oil prices has seen a surge over the past few days, rallying on to an all-time high of above $720/metric for Gasoline and above $600/metric for gas oil as of Wednesday, September 15. This is just from a week earlier of Tuesday, 7th September, 2021 as reported by API indicating a six-week high.
The price of crude (WTI) climbed 3.16% on Wednesday, reaching $72.69 by 10:00 am – up $2.23 per barrel on the day while Brent crude climbed 2.89%, up $2.13 per barrel, reaching $75.73.
Prices of finished products particularly Gasoline (petrol) has surged from $694/MT as of Monday, September 13 to above $720/MT as of Thursday, September 16, representing 3.7% increment.
While Gasoil (diesel) prices has seen an increase from $572/MT as of Sunday, September 12 to $604/MT as of Thursday, September 16, representing 5.6% increment.
The statement said aside the international market prices affecting the pricing of the petroleum products, the local currency has seen a further depreciation in recent times as compared to major trading currencies, particularly the US Dollar.
“The two key indicators, that is international market prices and foreign exchange differentials, are all likely to affect average pump prices of petroleum products by between 2% to 3% or (10p/Litre for both products ) in this second pricing window of September, 2021.
“This would likely translate to reviewed figures by the various Oil Marketing Companies (OMCs) as those selling at current prices for gasoline and gasoil at GH¢6.38 could be reviewed upwards to between GH¢6.45/-GH¢6.52/L for both Gasoline and Gasoil.”
COPEC is therefore calling for immediate measures to forestall the trend.
It gave an option that if the recovery levy is not removed, then there should be the need for “authorities working through the Ministries of Finance and Energy to apply the already collected funds accruing to the Price Stabilization and Recovery Levy Fund to offset or stabilise the FOREX and price differentials from increasing on the price build up”.
It is also calling for a further review downwards of other taxes such as the special petroleum tax (SPT) on petroleum products ahead of the presentation of the 2022 budget statement.
It is also demanding an “immediate and a thorough review of the entire petroleum price deregulation programme with the view to limiting the overbearing influence of both taxes and forex on pump prices”.