The Chamber of Petroleum Consumers (COPEC) has issued a warning that escalating tensions in the Middle East may lead to an increase in fuel prices during the first pricing window of July. COPEC noted that the ongoing conflict between Iran and Israel, which has been exacerbated by recent U.S. airstrikes on three Iranian nuclear sites, is likely to have serious implications for global oil supply. This situation could particularly affect fuel-importing countries like Ghana.
Concerns have been raised about the possibility of Iran closing the Strait of Hormuz, a crucial passage through which approximately 20% of the world’s oil and gas is transported. Such a closure could result in further disruptions in supply and increased price volatility. In an interview with Citi Business News, Duncan Amoah, Executive Secretary of COPEC, expressed his apprehension regarding the potential ripple effects on crude oil prices. COPEC is advising consumers to prepare for possible price increases and is urging policymakers to closely monitor global developments. They are also calling for the implementation of mitigation strategies to alleviate the impact on Ghanaians.
“This week is likely to see a lot of activity on the international front as far as fuel pricing or petroleum pricing is concerned and Ghana clearly cannot be excused the possibility of paying more for fuel. What I see happening locally is that the BDCs may take a cue knowing well that it is riskier landing cargo than it was a week before due to the tensions on the strait and so I will not be surprised that in the course of the week some BDCs will adjust their prices upwards and once that happens some of the OMCs will clearly have to follow because they buy directly from the BDCs,” he said.
While the second pricing window of June provided relief for consumers, Duncan Amoah, does not expect the trend to continue into the first pricing window of July. “Anytime crude oil prices go up, the net effect on prices of finished petroleum products is usually felt between 5-7 days and I am sure this new week prices globally as far as Platt is concerned would not come funny and so whatever the oil marketing companies should decide for the first window July to do…will probably need to be justified but I do think that clearly Ghanaians should expect upward adjustment in fuel prices due to the geopolitical across the Middle East,” he added.
He has also commended the government for the decision to suspend the proposed GH¢1 increment under the Energy Sector Shortfall and Debt Repayment Levy (ESSDRL). The executive secretary of COPEC is also asking government to get the Tema Oil refinery back on its feet even as management of TOR says it is on track to resume full operations by October 2025.
By: Daniel Sackitey