The government has extended the GH¢2 per litre reduction in the regulatory margin on diesel into September, in a move aimed at cushioning consumers against rising petroleum prices.
The intervention, which was originally introduced as a temporary measure for two pricing windows, was expected to expire at the end of August.
However, the government has decided to maintain the GH¢2 diesel intervention for at least the next pricing window in September, preventing the full regulatory margin from being restored to diesel prices.
The decision comes amid growing concerns over an expected increase in fuel prices at the pumps from the first pricing window of September.
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The extension is expected to provide some relief to motorists, transport operators and businesses, particularly as diesel prices are already selling at around GH¢17 per litre at most Oil Marketing Companies (OMCs).
The Chamber of Petroleum Consumers (COPEC) had been urging the government to extend the intervention, warning that allowing the measure to expire could push diesel prices close to GH¢20 per litre.
COPEC Executive Secretary Duncan Amoah said maintaining the intervention would help protect consumers from the expected increase in petroleum prices.
“Government originally had indicated it was going to do that for just two window periods, which is a month. We would want to plead that at least the next two weeks be considered again,” he said in an interview with Citi Business News.
“Already diesel is around GH¢17 a litre for most of the OMCs. Allowing the GH¢2 to come back [off] would mean we will be doing GH¢19, approaching GH¢20 a litre,” he added.
COPEC had also projected marginal increases in petroleum prices from Tuesday, September 1, citing developments on the international oil market.
According to Duncan Amoah, petrol prices are particularly likely to rise following a nearly 10% increase in the commodity’s international trading price over the preceding two weeks.
“Fuel prices are likely to inch up from the first window of September. Petrol most likely, since it’s done almost 10% to close trading over the past two-week window, and decisions [are] that our prices would go up,” he said.
The GH¢2 per litre diesel intervention was introduced on August 4 following a surge in international oil prices that pushed up petroleum prices on Ghana’s domestic market.
The extension represents the government’s third attempt to mitigate the impact of rising fuel prices since tensions in the Middle East began escalating in February.
The GH¢2 diesel intervention is expected to limit the immediate impact of higher international oil prices on diesel consumers and prevent a sharper increase in transport, logistics and operating costs for businesses.
Diesel prices have a broad impact on the economy because of their use in commercial transport, haulage, logistics, agriculture, construction and industrial operations.
A significant increase in diesel prices could therefore raise transportation and operating costs and eventually contribute to higher prices for goods and services.
By extending the intervention into September, the government is seeking to provide temporary relief to consumers while international oil market pressures continue to influence Ghana’s domestic fuel prices.
CNR