The Chamber of Petroleum Consumers, COPEC, has warned that fuel prices at the pumps may go above five Ghana cedis in a few days if measures are not put in place to stabilize the cedi against the dollar.
COPEC says the continuous depreciation of the cedi increased the price of a liter of petrol by 65 pesewas.
A sharp drop in the price of fuel on the global market also saw the price of petrol hitting 4 cedis due to a trade war between Russia and Saudi Arabia, coupled with the impact of the COVID-19 pandemic.
According COPEC, there is the need to put in place measures to arrest the fall of the cedi to stabilize prices of fuel at the pumps since Ghana is a net importer of oil.
Executive Director of COPEC, Duncan Amoah, argues that even though the easing of restrictions globally may have contributed to the prices of fuel going up on the global stage due to increased demand, the cedi is a major factor in the recent spike in prices.
“There are drivers that move fuel prices either down or up. There is also the demand-supply which is the global function on the international market. And then, the fact that we buy this commodity in dollars. We cannot price it in dollars in Ghana because we have a legal tender which is the Cedi. So, that conversion between the dollar and the Ghanaian Cedi is where the cedi’s strength comes to play. But the Cedi is also not stable especially when importers will apply what we call the forward forecast,” he explained.
He says if the Bank of Ghana and the Finance Minister refuse to initiate measures immediately to halt the fall of the local currency, motorists may unnecessarily pass on the cost to commuters.
“You cannot continue to charge the trotro or taxi driver more, anytime your cedi performs poorly. You cannot also continue to expect that the system will be sustained. Not long ago, the Bank of Ghana started the dollar auctioning. We think they should factor petroleum importers and give them some standard rate quarterly. That way they will be delinking the cedi’s performance to the dollar from impacting on the fuel pricing,” he added.