The slipping global oil price is the only explanation for the low fuel prices Ghanaians are now enjoying at the pump.
Weakened oil demand is triggered by fears of global recession coupled with the high interest rates by central banks to fight inflation.
Price of crude oil has dropped significantly to $75 per barrel from the high of $147 a year ago when the Ukraine war first started.
The supply disruption the war caused the oil markets has stabilized and resulted in realignment of the markets. With Russia now selling its oil to Asian countries like China and India instead of Western Europe.
There are also modestly higher supply by non OPEC countries including members of International Energy Agency (IEA) to replace the lost of Russia oil to the west. As a result there’s higher near term inventories globally which are forcing price of crude oil down.
On the local market there is enough supply in the country from the government’s Gold for Oil policy and the Bulk Import Distribution Export Companies (BIDEC). The government is finally able to pass the benefits of reduced oil price on the global market to Ghanaians.
The global outlook for oil for 2023 is a long path towards higher price later in the year. This is because of China’s reopening and importing lots of oil to boost its economic activities. Also Russia has extended period of oil production cut through to June to help raise the price of oil.
The government should take advantage of the opportunity presented by the current low price of oil globally. They should have a long term contract with a reliable source of supply of the petroleum products at the present favourable price. This will protect Ghanaians against the fluctuations and any future price hikes due to the volatility of the oil market and stabilize the economy.
This will ensure Ghanaians enjoy low fuel prices at the pump for a long term.
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