The government should consider establishing a strategic petroleum reserve to shield consumers from sudden increases in fuel prices and possible disruptions to supplies, the Chamber of Petroleum Consumers (COPEC) has proposed.

The reserve, according to COPEC, would allow the state to purchase and store petroleum products when international prices are favourable and release them onto the market when prices rise sharply.

Such a mechanism, the organisation argued, would provide Ghana with a buffer against fluctuations on the international market and reduce the impact of sudden fuel price increases on consumers.

COPEC also proposed that part of the petroleum products processed by local refineries could be channelled into the reserve to gradually build up the country’s stock.

“If I decide to even release that stock at $600 or $700, as a government, I’ll be able to recoup the investment I put in, and I’ll be able to sustain fuel prices,” he said.

The proposal comes amid recent increases in petroleum prices, with diesel rising from about GH¢14 to GH¢16 per litre to nearly GH¢20 per litre within a relatively short period.

COPEC said the recent price movements highlight the need for Ghana to develop a long-term mechanism to manage international market volatility rather than relying mainly on interventions after prices have already risen.

It suggested that between five and 10 per cent of products processed by local refineries could be set aside to build the strategic stock.

“The refineries seem to be working now, but I would advocate again that 5%, 10% of what the refineries are processing now, put it in a strategic reserve buffer,” he said.

Speaking on Channel One TV on Saturday, August 8, the Executive Secretary of COPEC, Duncan Amoah, said the reserve could be deployed during periods of severe price increases or when international supply disruptions prevent fuel cargoes from reaching Ghana.

“Tomorrow when you wake up, and there’s a reason for which cargoes cannot come, or prices have jumped from $800 to about $2,000, you can fall on these buffers,” he said.

Mr Amoah welcomed the government’s recent decision to reduce the price of diesel by GH¢2 per litre but said such measures should complement, rather than replace, a long-term strategy for managing fuel price volatility.