COPEC warns of imminent fuel price hikes due to cedi depreciation
Fuel pump
The Chamber of Petroleum Consumers (COPEC) has issued a warning that fuel prices at the pumps are expected to rise in the coming weeks due to the depreciation of the cedi.
Read full articleThis announcement follows recent price increases by some oil marketing companies, despite earlier projections that prices would decrease from mid-May.
These companies attribute the price hikes to the ongoing uncertainties in the exchange rate market. As of Tuesday, May 21, 2024, the exchange rate stood at GH¢15.20 per dollar at Forex Bureaus.
Duncan Amoah, the Executive Secretary of COPEC, stated that oil marketing companies are struggling with the volatility of the exchange rate. He mentioned that while some companies are exploring innovative ways to mitigate the impact of the cedi's depreciation, the instability makes planning challenging.
"Once you have a currency that you can’t predict its performance in the next two to three months, then you are forcing the importers to determine what values to set their pricing," he told Joy Business.
Amoah explained that business owners base their pricing forecasts on market expectations and currency performance. "If the importer is done selling his fuel, he has to pay the suppliers. He needs more cedis than he did when he was setting the price. A certain overrun may have occurred," he added.
He emphasized that importers are facing higher costs because they need more cedis to buy the same amount of dollars used to import fuel initially. "So clearly, something must be done and the government has a duty to ensure the stability of the cedi," Amoah stressed.
He further noted that the performance of the cedi and the international market prices of finished petroleum products significantly influence fuel prices at the pumps. Despite these challenges, most oil marketing companies have maintained their prices since last Thursday due to the cedi's depreciation.
