Fuel prices at the pumps are expected to remain unchanged for at least the next two weeks following a government directive to two local refineries to maintain their existing selling prices.
The directive affects the Tema Oil Refinery (TOR) and Sentuo Oil Refinery, which have been asked to continue supplying Oil Marketing Companies (OMCs) at their previous prices.
The move is expected to provide some relief to consumers amid pressure on fuel prices.
It comes in addition to the government’s existing GH¢2 diesel subsidy.
Chief Executive of the Chamber of Oil Marketing Companies (COMAC), Dr Riverson Oppong, said the refineries’ decision to maintain their prices could prevent an immediate increase at the pumps.
He explained that the Supplier Reference Exchange Rate (SREF) is a key factor in determining pump prices.
“Because the SREF is a very big indicator in the determination of the S pump. So, as long as your SREF does not change, as we know, basically your S pump should also reflect the same,” he said.
Dr Oppong explained that fuel pricing in Ghana follows a cost-reflective model, meaning changes in the various components of the industry’s cost structure ultimately affect pump prices.
“You know, I mean, we operate a very systematic standard. We’re creating that standard, which in petroleum economics we call the cost-reflective pricing,” he said.
He added that taxes, levies, and other costs are factored into the pricing process, while OMCs’ margins are determined separately.
“So whatever cost we incur, be it the SREF taxes and levies that are today being reviewed, we surely would add that, considering that our margin is what we set. Everything else is based on the industry price,” he said.
The government’s latest intervention could therefore delay the impact of higher costs on consumers, at least in the short term.
When asked whether the development could translate into a change in pump prices by Saturday or Monday, Dr Oppong said the industry would first have to review the new directive.
“Hopefully, because this narrative was passed with certain lines, and now we are going to review it,” he said.
The development means motorists are likely to see continued stability at the pumps as government and industry players assess the impact of the measures on the fuel pricing chain.
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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
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