Fuel prices to drop by up to 9% - ASEC predicts

Fuel prices in Ghana are expected to drop by five to nine percent. This forecast comes from the Africa Sustainable Energy Centre (ASEC).

The decline is mainly due to the strengthening of the Ghanaian cedi against the US dollar. Ghana adjusts fuel prices biweekly based on global oil prices, exchange rates, and import costs.

In the next pricing window, petrol may cost between GHS 12.00 and GHS 12.60 per litre. Diesel is projected to retail between GHS 12.60 and GHS 13.20 per litre, according to ASEC's assessment.

International crude oil prices have fallen from about $85 per barrel in January to around $64 now. The stronger cedi has a more direct impact on local fuel prices since imports are paid in dollars.

ASEC stated that importers spend fewer cedis for each dollar spent on fuel. This should lead to lower pump prices, providing relief for Ghanaians facing rising living costs.

However, ASEC warned that this price drop could hurt government revenue. Ghana relies on international oil prices for foreign exchange and budget income.

With crude at $64 per barrel, the government may earn less from petroleum exports. ASEC noted that falling global oil prices usually lead to revenue shortfalls unless driven by exchange rate gains.

The state might need to increase production volumes to meet revenue targets. If current trends continue, further fuel price reductions could occur later this year.

International crude prices are expected to stay between $62 and $65 per barrel due to increased OPEC+ production and reduced demand in major economies like the US and China.

ASEC will keep monitoring the market and provide insights for national policy decisions. They encourage balancing consumer relief with strategies for long-term energy security and fiscal stability.

Fuel prices are a key economic indicator in Ghana, impacting inflation and transportation costs. The anticipated reduction offers some relief amid ongoing economic recovery efforts for households and businesses.