Tuesday, June 16, 2015

Fuel prices go up again; by 4%




Prices of petroleum products are up by four percent effective Tuesday morning, with the exception of Premix fuel and residual fuel oil.

The price hikes have been influenced by the rising prices of petroleum products on the world market and the depreciation in value of the local currency, the cedi.

The four percent increment is the maximum price allowed for any Oil Marketing Company (OMC) to increase the price of the commodity.

OMCs can, however, sell their products below the 4% price under the full price deregulation of petroleum products which is kicking off partially today.

Sources say there will still be some marginal increases in the coming weeks until subsidies that have not been fully paid for are cleared.

Prices could have gone up by more than four percent this morning, however, the plan by the industry regulator is to do a gradual increment in the coming days.

Successive governments have grappled with the pricing of petroleum products.

For political reasons, governments have consistently refused to pass on price increments on the international market to consumers.

However, government's inability in recent times to pay for the under-recoveries has resulted in huge sums being owed to Bulk Oil Distribution Companies who last year caused a temporary shortage of fuel on the local market by insisting that unless they were paid huge sums owed them, they would not release any petroleum products onto the market.

In the wake of the unsustainability of the current trend where government sets the prices lower than the oil marketing companies would, and fails to pay the difference, steps are being taken to implement full deregulation.

By deregulation, government, through the National Petroleum Authority (NPA) will no longer set the prices.

The prices will now be determined by market forces.

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Source: Ghana | Joy Business