Executive Director of the Africa Centre for Energy Policy (ACEP), Ben Boakye, has cautioned that recent efforts to stabilise fuel prices may not provide immediate relief to consumers.
Speaking on PM Express Business Edition on Joy News on Thursday, Mr. Boakye explained that the effects of declining fuel prices typically take time to reflect in the broader economy.
He made the remarks on the sidelines of the IMF Spring Meetings in Washington, D.C., where global economic trends are being discussed.
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His comments come as the government implements measures aimed at cushioning consumers from rising petroleum prices driven by global shocks, particularly tensions in the Middle East.
However, Mr. Boakye noted that fuel price adjustments operate on multiple levels, making an immediate drop in the cost of goods and services unlikely.
“It will always happen at two levels — on the international market price and also the pass-through effects. Even when prices fall significantly, you’re not going to see goods and services adjust immediately,” he said.
He explained that businesses often delay reducing prices to maintain profit margins, which slows the transmission of lower fuel costs to consumers.
“People want to watch the market and see if they can maintain their margins, so the pass-through effect is always slow,” he added.
According to him, this lag means consumers may continue to feel the impact of earlier high fuel prices even after global prices begin to decline.
Despite the delay, Mr. Boakye expressed optimism that conditions could improve if global markets stabilise.
“We are hopeful that the market situation will normalise and create the signals needed to reverse some of these impacts in the medium term,” he noted.
Myjoyonline