The Chief Executive Officer of the Chamber of Bulk Oil Distributors (CBOD), Dr Patrick Ofori, has projected further reductions in fuel prices in Ghana as international crude oil prices retreat following renewed ceasefire efforts in the Middle East.
Speaking on Ghana Tonight on TV3, Monday night Dr Ofori said the global petroleum market had begun readjusting after heightened geopolitical tensions pushed crude oil prices to about US$100 per barrel last Friday—the highest level since May 22.
According to him, the latest ceasefire announcement has restored some confidence to the international market, resulting in crude oil prices falling to around US$88 per barrel.
He noted that the decline had already prompted one or two oil marketing companies (OMCs) in Ghana to marginally reduce the prices of petrol and diesel, with more companies expected to follow suit.
“The market has started readjusting,” he said, explaining that industry players continuously monitor international petroleum transactions, cargoes in transit and available stock levels to anticipate market movements and ensure consumers benefit whenever global prices decline.
Dr Ofori identified international crude oil prices and the exchange rate as the two key determinants of fuel prices in Ghana. While acknowledging that the cedi has remained relatively stable in recent weeks, he said volatility in global crude prices has become the dominant factor influencing domestic petroleum pricing.
The CBOD Chief Executive disclosed that the industry is engaging the National Petroleum Authority (NPA) to consider a more flexible pricing framework that allows oil marketing companies to respond more quickly to significant movements in international petroleum prices and not solely to major changes in the exchange rate.
He argued that such flexibility would enable consumers to enjoy price reductions more promptly whenever global market conditions improve.
Reflecting on lessons from the Russia-Ukraine conflict in 2022, Dr Ofori said many industry players suffered heavy financial losses after importing large volumes of petroleum products at elevated prices, only for international prices to decline sharply shortly afterwards.
To mitigate similar risks, he explained that bulk distributors now adopt more prudent procurement strategies by locking in portions of their purchases using daily, weekly or monthly average prices rather than committing to large volumes at a single market price.
According to him, the strategy has helped reduce exposure to international price volatility while enabling companies to remain competitive and pass on price reductions to consumers when market conditions permit.
Dr Ofori expressed optimism that should the current easing of geopolitical tensions persist, Ghanaian motorists and businesses could see further relief at the pumps in the coming days.
By: Christian Kpesese
