Bank of Ghana told to ‘arrest’ dollar to bring fuel prices under control

The Chamber of Petroleum Consumers Ghana (COPEC) has asked the Bank of Ghana and the Economic Management Team to take immediate steps to halt the fast decline of the cedi against the US dollar to stabilise fuel prices.

The Chamber attributed the continuous hikes in fuel prices to the “free fall” of the Cedi and cautioned that fuel prices could hit “uncontrollable” levels in future if the local currency was not stabilised.

In an interview with the Ghana News Agency, Mr Duncan Amoah, Executive Secretary of COPEC, said fuel prices could hit GH¢20 per litre by the end of the year if the rate of depreciation of the Cedi was not halted immediately.

“Bank of Ghana should find some immediate solution to halt the cedi’s steep depreciation. Whatever policy intervention that our Economic Management Team would need to put in place immediately to find a way to stabilise the cedi should be done,” he said.

“Availability of dollar, if not addressed in the coming days, we could also be hitting a fuel shortage situation as well,” Mr Amoah added.

Some oil marketing companies on Monday morning, October 17, 2022, adjusted their prices upwards, selling petrol and diesel for GH¢13.10 and GH¢15.99 per litre respectively.

The adjustments represent more than 10 per cent increment from the last pricing window, which closed on Saturday, October 15, 2022, with diesel and petrol then selling at an average GH¢11.05 and GH¢13.98 respectively.

Ahead of the current pricing window, which opened on Sunday, October 16, 2022, COPEC and the Institute for Energy Security (IES) projected an increase in fuel prices, citing the increases in price of petroleum products on the international market, and the “significant decline” in the value of the local currency against the dollar as the catalyst.

Whereas COPEC projected an increment of about 10 per cent for both petrol and diesel, the IES estimated that prices would go up by about 7 and 12 per cent for petrol and diesel respectively.

“Between the current window and the next window due, crude oil price is observed to have seen an increase of 3.66 per cent from $89.46 to $92.73 per barrel, whilst the dollar index has further gone up by about 4.08 per cent from GH¢10.21 to GH¢10.627 per dollar as per government rate (Conservative figures) though actual market rates are quite higher currently,” COPEC said in a statement.

In its review of the last pricing window, the IES said the cedi depreciated by 2.5 per cent from the previous rate of GH¢10.53 to the current rate of GH¢10.89, to the US dollar.

“In IES’ estimation, consumers of gasoline and gasoil may pay between 7 and 12 per cent more for a litre at the pump in the next two weeks, with gasoil per litre price hinging close to GH¢15,” it said.

The BoG recently embarked on a joint operation with the police, which led to the arrest of 76 individuals and entities who allegedly engaged in the buying and selling of foreign currencies without license.

The move formed part of the Bank’s strategy to sanitise the foreign exchange market and ensure compliance with the country’s foreign exchange regulations.

Source: GNA

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