Chamber of Petroleum Consumers warns that fuel prices may go up if Exchange Rate is not stabilized

The Chamber of Petroleum Consumers (COPEC) has said that fuel prices at the pumps may increase to over GHC5 if measures are not put in place to stabilise the cedi against its major trading currencies like the dollar.

Executive Secretary of COPEC, Duncan Amoah

According to COPEC, the constant depreciation of the cedi may cause an increase in the price of a litre of petrol by 65 pesewas.

A sharp drop in the price of fuel on the global market also saw the price of petrol hitting 4 cedis due to a trade war between Russia and Saudi Arabia, coupled with the impact of the COVID-19 pandemic.

According to COPEC, there is the need to put in place measures to arrest the fall of the cedi to stabilize prices of fuel at the pumps since Ghana is a net importer of oil.

The Executive Director of COPEC, Duncan Amoah, said the easing of restrictions may be a contributing factor to the prices of fuel going up globally. He added that the depreciation of the cedi is also a major factor.

“There are drivers that move fuel prices either down or up. There is also the demand-supply which is the global function on the international market. And then, the fact that we buy this commodity in dollars. We cannot price it in dollars in Ghana because we have a legal tender which is the Cedi. So, that conversion between the dollar and the Ghanaian Cedi is where the cedi’s strength comes to play. But the Cedi is also not stable especially when importers will apply what we call the forward forecast.”

He added that the Bank of Ghana and the Finance Minister must immediately put measures in place to prevent commercial drivers from passing on the increase to customers.

“You cannot continue to charge the trotro or taxi driver more, anytime your cedi performs poorly. You cannot also continue to expect that the system will be sustained. Not long ago, the Bank of Ghana started the dollar auctioning. We think they should factor petroleum importers and give them some standard rate quarterly. That way they will be delinking the cedi’s performance to the dollar from impacting on the fuel pricing,” he added.

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