Cedi depreciation to push fuel prices to ‘all time high’ – IES
The Institute of Energy Security is predicting that prices of fuel will reach an all-time high within the second pricing window in March.
The IES says fuel prices could go up by 2.5%.
This, they attribute to the depreciating rate of the cedi. Citi Business News finds out how consumers will accept this development.
The Executive Director of the Institute for Energy Security (IES) Paa Kwasi Anamoah Sakyi says prices will go up at the pumps soon.
“Our decision is informed by the fact that already the OMC’s have depressed margin, they have complained severally. If you look at the price build up and you use the ex-refinery price given to them by the BDC’s to do the computation, you realize that the price at which they are charging today, 5.17 on average term is something that makes them break even,” he explained.
He pointed out that smaller OMCs are the worse hit since they do not have what it takes to achieve economies of scale.
“So what we foresee is that as the cedi depreciates more, there is a likelihood that the BDC’s will increase their prices again and that will reflect in the prices that the OMC’s would set and if that happens, we expect to see another increment of not less than 2.5 percent,” Anamuah Sakyi stressed.
Some consumers and motorists are not happy about the increase in fuel prices, lamenting that this could affect prices of goods and services.
“Previously a 100cedis worth of fuel could take us through the whole day’s business, but now that is not the case. And now competition is keener so we are rather running at huge losses. We plead with them to rather reduce fuel prices. Three trips to Madina from Osu can cost about 170 cedis. We plead with government not to increase fuel but rather reduce it” a bus operator stated.
OMCs warn of effect
The Association of Oil Marketing Companies had warned they may be forced to increase their prices at the pumps if the rate of depreciation continues.