Institute of Energy Security predicts that cedi depreciation will push fuel prices to ‘all-time high’

Fuel station
  • The Institute of Energy Security has predicted that fuel prices could reach an all-time high in the second pricing window.
  • Executive Director of the IES Paa Kwasi Anamuah Sakyi said this will be due to the cedi depreciation against the dollar.
  • Earlier, Oil Marketing Companies have predicted an increase in fuel prices if depreciation rate is not addressed.

The Institute of Energy Security (IES) has predicted that the prices of fuel will reach an all-time high within the second pricing window in March.

According to the IES fuel prices could go up by 2.5%.

The Executive Director of the IES Paa Kwasi Anamuah Sakyi attributed the increase in fuel prices to the depreciating rate of the cedi. 

“Our decision is informed by the fact that already the OMC’s have depressed margin, they have complained severally. If you look at the price build up and you use the ex-refinery price given to them by the BDC’s to do the computation, you realize that the price at which they are charging today, 5.17 on the average term is something that makes them break even,” he explained.

He indicated that the smaller OMCs are the worse hit since they do not have what it takes to achieve economies of scale.

“So what we foresee is that as the cedi depreciates more, there is a likelihood that the BDC’s will increase their prices again and that will reflect in the prices that the OMC’s would set and if that happens, we expect to see another increment of not less than 2.5 percent.”

This is coming after the Association of Oil Marketing Companies cautioned that they may be forced to increase their prices at the pumps if the depreciation rate continues.

Meanwhile, consumers are not happy about the increase in fuel prices. They argue that the increase could affect the prices of goods and services.

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