Fuel prices to increase between 3 and 5%

Prices of fuel are expected to go up by between three and five percent for the second pricing window in January.

The second pricing window period spans from Tuesday, January 16, 2018 till the end of the month.

According to the Institute of Energy Security (IES), the development can be attributed to the increase in crude oil prices, performance of the cedi, among other key pointers.

This will be the first time prices will go up since the reduction in the price stabilization levy for Liquefied Petroleum Gas (LPG) and diesel was announced by the National Petroleum Authority (NPA) in December last year (2017).

The price stabilization levy component for the two products has since been reduced from 10 to 3 pesewas.

This means the total tax component on a litre of diesel has dropped from 1 cedi 16 pesewas to 1 cedi 8 pesewas.

Also, the tax component on a litre of LPG has declined from 54 pesewas to 46 pesewas.

But the Principal Research Analyst at the IES Richmond Rockson tells Citi Business News the increase is expected looking at the current trend in fuel prices on the international market.

“Crude prices have gone up by about six percent. Finished products also went up about six percent. Our cedi has also depreciated and in the last window over the period we were supposed to have a number of increment which has not been done by the OMCs so most of them are complaining that they have already incurred losses. So in this particular window, we foresee that most of them are going to try to chip into margins to be able to make up for it otherwise they will still be making losses” he said.

Most Oil Marketing Companies for the1^st pricing window in January kept their prices unchanged.

This development was largely attributed to the relative stability on the international market.

However, if prices go up by 3 percent, it means a litre each of petrol and diesel could be sold to you at 4 cedis 62 pesewas at the pumps of major OMCs.

On the other hand, be prepared to pay about 4 cedis 71 pesewas at the pumps of some major OMCs if prices are increased by 5 percent.

Richmond Rockson says consumers are likely to pay more at the pumps for the second pricing window with the increase in petroleum prices on the international market.

“Consumers definitely are going to pay more in the next window unless the NPA or OMC’s do something; otherwise, consumers must definitely brace themselves to pay more” he added.

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By: Jessica Ayorkor Aryee/citibusinessnews.com/Ghana