According to COPEC, the rise is due to some fast depreciation of the cedi against the dollar.
COPEC said this in a press statement it released on Sunday, December 8, 2019, and was signed by the Executive Secretary of the Chamber, Duncan Amoah.
The statement said a “recent fast depreciation of the cedi against the dollar from ¢5.53 to around ¢5.710 forward rates is largely responsible for this increase in prices…”
Mr Amoah, however, admits that “there have been some “marginal increases in FOB prices as freight premiums have shot up a bit due to the IMO Cap 2020 programme”.
COPEC is, therefore, urging the “Monetary Policy Committee to work very hard to control the fast-depreciating cedi in order to avoid any needless fuel price increases at a time when most petroleum consumers are already complaining of very harsh fuel prices across pumps within the country”.
Here’s COPEC’s full statement:
CHECK THE SPATE OF THESE FUEL PRICE INCREASES.
Fuel prices across most of the major Oil Marketing Companies (OMCs) have seen an increase of almost 1% since 7 pm on Friday, 6/12/19.
Average pump prices that hitherto was at 5.360/ litre for both petrol and diesel have seen an increase of 5 pesewas to current new prices of 5.410/ litre or 24.345/ gallon for both petrol and diesel.
The recent fast depreciation of the cedi from ¢5.53 to around ¢5.710 forward rates is largely responsible for this increase in prices though there’s also been some marginal increases in FOB prices as freight premiums have shot up a bit due to the IMO Cap 2020 programme.
The depreciation of the cedi if left unchecked will certainly see prices going up again and even higher in the second window of this month.
Whiles acknowledging some recent efforts by the Bank of Ghana to auction dollars with the aim to stabilising the forex rates, the recent trend of depreciation seem to point to little gains in that regard as fuel imports continue to operate with forward forecasts as far as forex rates are concerned.
There simply is no guarantee per the current auction module to any of the fuel importers, as the net effect of the cedi’s depreciation continues to be directly impacting on the trading numbers that eventually reflects in pump prices.
It is our expectation that the Monetary Policy Committee will work very hard to control the fast depreciating currency in order to avoid any needless fuel price increases at a time when most petroleum consumers are already complaining of very harsh fuel prices across pumps within the country.
We further call on the Government to review some of the nuisance and needless fuel taxes as we currently have in the price build-up in the country since the 2020 budget has set out in clear terms to focus on clamping down on fuel smuggling which is known to cost the country over 1.6 billion in taxes evaded annually.