Cedi depreciation to erode oil price gain in December, analyst predicts

Energy think tank Institute for Energy Security (IES) says though they expect a reduction of fuel prices in December, the 3.09percent depreciation of the local currency (cedi) may affect the gains from the reduction in international fuel prices in the country.

The energy analysts believe that prices of various finished products will be affected by the 13.45% fall in the price of gasoline, and the 11.63% fall in the price of Gasoil, as well as the 1.88% fall in the price of LPG, they were, however, quick to say that the 3.09% depreciation of the cedi against the US dollar is expected to erode portions of the gains from the reductions in international fuel prices.

“The price of LPG is however expected to remain stable on account of the cedi’s depreciation,” the institute said.

As a result, the IES said it foresees a fall of between 10% and 8% in the prices of Gasoline and Gasoil in the next pricing window.

November 2022 second pricing-window witnessed reductions in price of key finished products on the domestic fuel market at all Oil Marketing Companies (OMC) outlets monitored by the IES.

The reduction, according to the institute, was in response to the fall in international prices.

The price reductions over the last pricing window pegs the national average price per litre of Gasoline at Gh¢16.31 from Gh¢17.62, representing a 7.43% reduction over the period. Gasoil’s national average price per litre also fell by roughly 13.91% to move from Gh¢23.07 to Gh¢19.86.

In the pricing window under review, the IES MarketScan picked TotalEnergies, Goil, Engen, Petrosol, Engen, Sel, and Shell-Vivo as OMCs with the highest-priced fuel on the market. Benab Oil, Zen Petroleum, Star Oil, and Goodness Oil were spotted as some of the OMCs with the least-priced fuel on the market, at the end of the November second Pricing-window.

World oil market

International Crude oil benchmark Brent saw a 6.31% decrease in price over the previous window’s average price of $95.11 per barrel to the present average price of $89.11 per barrel.

As fresh worries surrounding China roiled global markets on Monday, oil prices fell to their lowest levels in 11 months.

The international benchmark Brent Crude price fell 41% from the $139 per barrel price peak attained in March following Russia’s invasion of Ukraine, falling to $82 on November 28, 2022, its lowest level since January 6, 2022.

The strict zero-Covid policy that China, the largest oil importer in the world, is still enforcing has sparked new worries about the demand for oil. As a result, Brent fell by almost 15% in November, and despite the sporadic appearance of protests across the country, the Chinese government maintains its firm stance on its stringent pandemic policies.

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