Beginning June 2022, the price of petrol is expected to increase by 5% to 9%, the Institute for Energy Security (IES) has predicted.

However, the price diesel and liquefied petroleum gas (LPG) are expected to remain unchanged.

“The 5.49 and 4.13 percentage drops in the prices of diesel and LPG respectively on the international market may not necessarily lead to a reduction at local retail outlets as most marketers will look to maintain their prices to offset the losses from the depreciation of the cedi”, the energy think tank stated in its projection for the first pricing window of June 2022.

On the back of the cedi’s depreciation and the 11.05% jump in the price of diesel on the international fuel market, petrol in Ghana is set to sell above ¢10.00 per litre, which translates into ¢45 per gallon. Meanwhile the price of diesel may cross the ¢12.00 per litre mark (¢54.00 per gallon) across most Oil Marketing Companies in spite of the drop in price on the world market, owing to the decline in the value of the cedi against the greenback.

Currently, the national average price is pegged at ¢9.75 per litre, and ¢11.71 per litre for petrol and diesel respectively. This is an increase of 5.06% on the previous average per litre price of ¢9.28 for petrol, and a 5.30% increase over the previous diesel average price of ¢11.12 per litre.

Causes of fuel price increases

Prices of oil have over the window under review seen jumps that have been influenced largely by four main market movers.

One is the rising demand across the world and, in Europe and the Americas especially as summer nears.

The second factor has also been the fall in supply, which has been aided by the decline in Russian exports to the European region as a result of sanctions and caution placed on trading with Russia for its invasion of Ukraine.

Third, the United States of America's inventory build has declined due to its reliance on reserves to offset the catastrophic impact of Russian oil exports ceasing on the global energy space. For the first time since August 2021, the US refinery intake surpassed 16 million barrel per day.

And lastly, for bullish oil traders the hope that China would soon lift its COVID-related restrictions to prop demand could yield to an increase in prices as the previous supply issues linger.