Motorists should brace for more fuel price increases in the coming weeks as oil marketing companies grapple with rising international petroleum costs and mounting pressure across the downstream sector, the Chamber of Oil Marketing Companies has warned.
The Chief Executive Officer of COMAC, Dr Riverson Oppong, says the latest adjustments at the pumps are being driven by developments far beyond Ghana's borders, leaving local fuel retailers with little room to hold prices where they are.
According to him, escalating tensions in the Middle East, rising spot market prices and higher supply costs from Bulk Distribution Companies are forcing oil marketing companies to pass on some of the additional costs if they are to remain in business.
"We see the increment coming up, showing that the oil marketing companies now want to show that when fuel prices are increasing, they're also going to do the same.
"They're not going to wait for NPA to review prices perhaps with a new window before it's done." - Dr Riverson Oppong
Global market driving local prices
Dr Oppong said the pricing behaviour of oil marketing companies has changed because conditions in the international market have become increasingly unpredictable.
In previous pricing windows, many companies absorbed part of the cost increases in an effort to remain competitive. That strategy, he argued, has come at a significant financial cost.
"The so called price war; price went down in the past two or three windows. We've played our part, but now the circumstances within the Middle East are going up again," he said.
He explained that petroleum products are now being purchased largely at prevailing spot market prices, while Bulk Distribution Companies are adjusting their own selling prices more frequently in response to changing international conditions.
"What you see now is that the spot purchase prices are being initiated and that mandates us to also give a cost reflective price to the Ghanaian," Dr Oppong stated.
He rejected suggestions that local industry players were raising prices at will, insisting that the volatility originates from the global petroleum market.
"The uncertainty is not from us. It is from the global market price which nobody controls.
"I don't believe it's fair for anybody to say that traders are increasing their prices, BDCs are increasing their prices and OMCs should maintain prices." - Dr Riverson Oppong
Industry under financial strain
Beyond rising fuel prices, COMAC says many companies within the downstream petroleum sector are facing growing financial difficulties.
Dr Oppong said shrinking profit margins over the past five years have left several oil marketing companies struggling to meet their financial obligations, particularly smaller operators with outstanding bank loans.
"If you take the pain to understand how the profits of the oil marketing companies have shrunk for the past five years, you'll be shocked.
"The loans which they are not able to pay the banks, and here I'm talking about the smaller OMCs, the struggle is real." - Dr Riverson Oppong
He added that Bulk Distribution Companies are experiencing similar pressures, warning that sustained financial strain across the industry could eventually affect the stability of Ghana's downstream petroleum market.
COMAC renews call for levy review
The Chamber is also renewing its appeal for government to temporarily suspend the additional GH¢1 levy imposed on petroleum products.
Dr Oppong argued that the levy was introduced when fuel prices had fallen sharply, making it easier for consumers to absorb the extra charge. That situation, he said, has changed.
"We were 17 when it went to 10, and for that matter it could justify a one cedi. But now we are going back to 17, and there's more reason why some of us were asking for a clause that will say when the price hits certain levels or a certain percentage increase, this one cedi will be taken off." - Dr Riverson Oppong
While acknowledging that the levy has helped government mobilise revenue to address energy sector obligations, he said consumers and businesses now deserve temporary relief as fuel prices climb again.
"We have heard the minister said that the one cedi has been able to accumulate so much to pay for our doomsday debt, which is good. We are happy. But now that we are also suffering, please release us small." - Dr Riverson Oppong
COMAC has consistently maintained that the outlook for fuel prices remains closely tied to international oil markets, exchange rate movements and import costs.
With those factors still moving in an unfavourable direction, the Chamber says motorists should prepare for further price adjustments in the next pricing window unless conditions improve.
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