The Chief Executive Officer of the National Petroleum Authority, Godwin Kudzo Tameklo, says exchange rate movements and global import dynamics remain the most important factors influencing petroleum pricing in Ghana.
Speaking in an interview on the impact of exchange rates and import patterns on fuel price stability, Mr. Tameklo explained that Ghana’s heavy reliance on imported petroleum products makes domestic pump prices highly sensitive to international market developments.
“Two principal determinants of petroleum pricing in this country are the FOB pricing and the exchange rate,” he said, noting that the structure of Ghana’s downstream petroleum sector means external factors often shape local prices.
Limited refining capacity increases reliance on imports
Mr. Tameklo pointed out that Ghana’s limited refining capacity continues to affect the pricing structure of petroleum products.
According to him, the Tema Oil Refinery has not seen significant expansion in nearly two decades, making the country dependent on imports to meet local fuel demand.
“Tema Oil Refinery is almost seventeen years old, and not much as expected has been done with it,” he said, adding that new interventions such as the Sentuo Oil Refinery are beginning to change the dynamics in the market.
He explained that nearly 60 percent of petroleum products consumed in Ghana are imported, meaning global supply developments directly affect the local market.
Global tensions driving higher fuel costs
The NPA CEO also highlighted how geopolitical developments are pushing international fuel prices higher.
He cited the example of diesel, whose international price has increased sharply from about $780 per metric ton to nearly $1,200 per metric ton.
According to him, global conflicts and supply disruptions around the Strait of Hormuz have increased the cost of transporting petroleum products.
Insurance premiums for shipping petroleum cargoes have also doubled.
“You wouldn’t want to pass your vessel, a vessel that costs you one hundred million dollars, and then pay insurance of two hundred fifty thousand dollars.” - Godwin Kudzo Tameklo
Mr. Tameklo noted that when shipping companies are forced to take longer or safer routes due to geopolitical tensions, freight costs increase further, placing additional pressure on pump prices.
Currency stability helping cushion price shocks
Despite the rising global costs, Mr. Tameklo said the relative stability of the Ghanaian cedi has helped cushion the full impact on consumers.
He explained that the currency has remained relatively stable for more than thirteen months, helping prevent a sharper increase in domestic petroleum prices. “The stability of the Ghanaian currency has prevented a potential disaster in pricing,” he noted.
The NPA CEO added that the authority continues to monitor oil marketing companies and enforce the price floor mechanism introduced to protect the downstream petroleum sector and maintain pricing stability in the country.
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