Fuel prices on the global markets have fallen sharply from over 80 dollars a barrel to about 72 dollars per barrel.
This comes after some international agencies like Goldman Sachs projected the commodity could hit 90 dollars a barrel by the end of the year.
What could be the cause of this sudden downturn?
Energy Consultant, Dr Yussif Sulemana explained that “The suggestion of releasing the strategic reserve by consuming nations which was championed by the U.S and the insurgence of the Covid virus, I mean the new covid variant within the European continent” could be the reason for the sharp decline.
“In recent days, we are told we have the emergence of this variant in South Africa called the Omicron. And so, what we are going to see will be the gradual coming back of lockdowns which we are already seeing.”
The price of Brent crude oil on the international market fell by more than 11 per cent after staying above the 80-dollar mark since the first week of October this year.
The hike in the price of the product is attributed to a number of factors including the efficacy of the COVID-19 vaccines. Economies across the globe began to reopen and demand for fuel picked up alongside.
Locally, the price of fuel at the pumps in January was slightly over GHS4 per litre but now it’s slowly inching to 8 cedis per litre.
What is the likely impact of this development on an oil-producing country like Ghana?
Dr Sulemana explained that “It is a good omen in terms of us looking at the downstream side in terms of how it might end up cooling down the market. But in general, we don’t want to have too many jobs in the global space because we have upstream to think about.”
He however added that “if it stays around $72 a barrel as it is now and it is prolonged for a very long period, I think it is going to be a comfortable place for both players in the upstream and the downstream. But it is early days yet to tell where these early prices are going to settle.”