The Chamber of Petroleum Consumers (COPEC) has warned that if Ghanaian authorities do nothing to address rising global fuel prices as Russia invades Ukraine, fuel prices at the pumps could cross the GH8 mark in the first pricing window of March.
Brent Crude Oil, which was trading for around $66 a barrel a year ago and $78 at the start of 2022, jumped 7.3 percent to $103.9 a barrel just before 10 a.m. GMT on Thursday, the highest level since July 2014.
This follows Russian President Vladimir Putin’s order for a full-scale military assault on Ukraine, which drew widespread international condemnation.
Stock markets across Europe fell sharply as a result of Russia’s actions, with the UK’s FTSE 100 index falling 2.5 percent and Germany’s Dax index falling 3.5 percent. Asia’s stock markets had also plummeted.
The price of gold, which is considered a safe-haven asset in times of uncertainty, increased by 2%.
Energy prices had already been rising in recent months due to a combination of factors such as the pandemic, limited supply, and rising tensions between Russia and Ukraine.
Many analysts predict that prices will rise even further, owing to concerns about a major disruption in the global energy supply.
Duncan Amoah, Executive Secretary of the Chamber of Petroleum Consumers, told Citi Business News that the impact of the Ukraine crisis on fuel prices at local pumps could worsen soon.
“Where you have the third-biggest oil producer and second-biggest producer of natural gas in Russia, currently having an escalation with Ukraine, what you will get is that the supply side is going to be greatly hampered. Once supply side is hampered yet demand continues to grow, prices will only head north.”
“If bombings continue into the weekend, oil will cross $110 a barrel. If the tensions do not de-escalate in Ukraine-Russia now, I can safely see fuel crossing GH¢8.50 per liter at Ghanaian pumps by March 1, 2022,” he added.
Use windfall from sale of Ghana’s oil to cushion citizens – Gov’t urged
In its 2022 budget, the government set the year’s benchmark crude oil price at $61.23 per barrel, up from $54.75 per barrel in 2021. Meanwhile, the projected Petroleum Benchmark Revenue for 2022 is $1,006.1 million.
With the price of a barrel of Brent Crude approaching $100, Mr. Amoah is urging the government to act now by using the windfall from the sale of Ghanaian oil to keep gas prices from rising.
“We would need to sit to decide as a country on whether we would simply apply part of the enhanced revenue we are making from oil exports to the Bulk Distribution Companies to enable them to waive off the sporadic increases we are seeing on the international market, as opposed to allowing it to be passed on at the pumps. Those are critical decisions that need to be taken today. Waiting till the end of the month will only compound our problems.”
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SOURCE: CITINEWS
