The Akufo Addo administration has been backed into a corner to start preparing to announce major slashes in ex-pump prices of petroleum product following the latest significant slump in the world market prices of crude oil.
This follows the drastic plunge in world market prices of Crude oil. The commodity has suffered a 20% meltdown overnight, with prices dropping from some US$ 45 per barrel to US$ 33 per barrel.
Goldman Sachs sees Brent crude prices averaging $30 in Q2 and Q3, with risks of falling to $20. This is indeed a significant plunge from prices above US$ 50 per barrel that Ghana has hedged its crude price expectations on both in imports and exports.
The Chamber of Petroleum Consumers (COPEC) in a statement released today, wants Oil Marketing Companies (OMCs) in the country to reduce their ex-pump prices for consumers to reflect the sustained decline in the global crude oil prices.
According to COPEC, consumers should be benefitting a reduction of between 10%-32% in reduction of ex-pump petroleum prices.
This would be an all-time high, given the fact that such reductions have characteristically been in the region of 2% in the past.
“It is our expectation in the coming few days that the various Oil Marketing Companies and the BDCs will ensure the Ghanaian is given nothing but the full benefit of these sustained reductions in fuel prices on the international markets,” COPEC said in their statement.
The latest concerns over rapidly dropping crude oil prices worldwide comes on the back of the ravaging coronavirus, Covid-19 and a price war between the Organisation of Petroleum Export Countries (OPEC) and Russia which has pushed prices to between $28 a barrel as at Monday, March 9, 2020, the lowest in four years.
Meanwhile, COPEC suspects that the government might want to short-change consumers by finding a reason in the price stabilization and recovery levy to maintain high ex-pump prices. COPEC wants the levy scrapped.
“The PSRL must be immediately scrapped from the Price Build Up and a more sustainable source of funding be instituted for premix in order that the whooping 16p/litre charge on fuel prices can be dropped permanently to ease the pressure on pump prices immediately forthwith, we cannot continue to deceive the Ghanaian of a deregulated petroleum pricing environment which is somehow also micromanaged against the very people we expect to bear with when there are increases but someway somehow deny those same people any reductions when the indications point in that direction,” COPEC indicated.