Renewed pressure could soon hit Ghana’s fuel pumps as international crude oil prices approach US$90 per barrel, raising concerns that the government may need to intervene to cushion consumers if the upward trend persists.
Brent crude rose to about US$88.50 per barrel on Friday, August 14, amid renewed concerns over disruptions to global oil supplies. The benchmark has also traded around the US$90 mark in recent days.
For Ghana, sustained increases in global crude prices could directly affect domestic fuel prices because petroleum products are priced in a deregulated market.
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Under the pricing framework of the National Petroleum Authority (NPA), petrol, diesel and LPG prices reflect international market prices alongside other components, including the exchange rate, taxes, levies and industry margins.
The NPA sets price floors, while Oil Marketing Companies determine the actual prices consumers pay at the pump.
This means that if international oil prices continue to rise—particularly alongside pressure on the cedi—the increase could eventually feed into domestic fuel prices.
The latest NPA figures show that the price floor for petrol has actually fallen in the second pricing window of August.
The petrol price floor dropped from GH¢14.53 to GH¢13.92 per litre, representing a reduction of GH¢0.61 per litre, or 4.2%.
LPG also recorded a marginal decline, with its price floor falling from GH¢11.06 to GH¢10.98 per kilogram, a reduction of GH¢0.08, or about 0.7%.
At face value, the reductions offer some relief to consumers.
However, the situation is more complex because the NPA price floor is a minimum benchmark and does not necessarily represent the final price motorists pay at filling stations.
The price floor does not include certain components such as premiums charged by International Oil Trading Companies, operating margins of Bulk Import, Distribution and Export Companies, and marketers’ and dealers’ margins.
These components are determined separately.
As a result, some Oil Marketing Companies may continue to sell petrol above the NPA price floor even when the official benchmark has declined.
The main concern is not the latest reduction in Ghana’s petrol price floor, but the direction of international oil prices.
If Brent crude remains close to or moves decisively above US$90 per barrel, the cost of importing refined petroleum products could increase, potentially putting upward pressure on domestic pump prices in subsequent pricing windows.
The concern is particularly significant because the government has already intervened in the diesel market, while petrol is currently more exposed to market movements.
In August, the government directed the NPA to absorb GH¢2 per litre on diesel for one month as part of measures to cushion consumers from rising fuel prices.
The temporary intervention has created a clear distinction between the two major transport fuels: diesel is receiving policy support, while petrol remains more directly exposed to market forces.
That could become increasingly difficult if petrol prices begin to rise sharply.
The immediate impact of rising petrol prices would be felt by motorists, but the consequences would extend far beyond filling stations.
Petrol is a major input into Ghana’s transportation and distribution system. Higher fuel costs can increase the cost of transporting people and goods, putting pressure on transport fares and the operating expenses of businesses.
For households, this could mean higher transportation costs and potentially increased prices for goods and services as businesses pass some of their additional logistics and operating costs on to consumers.
Small businesses and informal operators could be particularly vulnerable because they often have limited capacity to absorb higher operating expenses.
The wider concern, therefore, is not simply how much it will cost to fill a vehicle’s tank, but how sustained fuel-price increases could affect Ghana’s broader cost of living.