Executive Director of the Africa Centre for Energy Policy, Ben Boakye, has cautioned that businesses are unlikely to quickly reduce prices despite easing global oil prices and government intervention.

Speaking on PM Express Business Edition on Joy News Thursday, on the sidelines of the IMF Spring Meetings in Washington DC, he said the transmission of lower fuel prices to consumers will take time.

His comments come as government moves to stabilise petroleum prices following shocks linked to the Middle East conflict, with officials insisting the intervention is meant to cushion consumers.

But Mr Boakye said price adjustments in the real economy do not happen instantly.

“It will always happen at two levels, on the international market price and also the past three effects, even when prices come down from $100 per barrel to say $50 or $60, you’re not going to have goods and services reduced or the impact reversed almost immediately.”

He explained that businesses are driven by profit considerations and will often delay passing on cost reductions.

“Because people always want to make a margin. They want to watch this space to see whether they can even keep the same prices.”

According to him, this behaviour slows the benefit to consumers even when global conditions improve.

“The pass-through effect is always slow, so that pass-through effect on the average consumer will drag for a longer period of time.”

He noted that while the situation may stabilise over time, immediate relief should not be expected.

“But we’re hoping that the market situation will normalise, would, you know, stabilise as soon as possible, and that create a signal for us to look at the pass-through effect and see how we can reverse some of those impacts in the medium term.”