Some Oil Marketing Companies (OMCs) have begun reviewing prices of their petroleum products following recent hikes in crude oil prices on the international market, Joy Business has learnt.
The marginal depreciation of the country's currency has also affected oil prices.
JoyBusiness checks have revealed companies such as Shell and Total have “led the pack” increasing petrol price by almost 8%.
This means that a litre of petrol sold by the two companies is now being sold at ¢4.46 pesewas after the almost 8% increase from the previous price.
Diesel price has also gone up by 5% at the two companies, pushing the price of a litre of diesel to ¢4.33 pesewas.
A gallon of diesel sells at ¢18.58 pesewas, with a gallon of petrol going for ¢20.07 pesewas.
The crude oil price hike on the international market was triggered by the tropical storms that hit US oil-rich state of Texas.
More than 10 refineries in both Houston and Corpus Christi were shut down after an unfathomable amount of rainwater dropped on the two Texas cities.
The increase in petroleum prices in Ghana is the highest in the year, after a marginal drop in March.
But, the National Petroleum Authority (NPA) has said price jumps at the pumps will have to be justified by the OMCs.
NPA's Director in charge of Pricing, Research and Planning, Alpha Welbeck told Joy Business the Authority will regulate the market to avoid disparity in prices.
She, however, expressed optimism petrol prices will go down in the next window when the international market has stabilised.
How global factors affect local price
The key components of petroleum product prices in Ghana are the Free On Board (FOB) prices and the USD/GHS exchange rate.
FOB prices which are directly correlated to the price of Crude Oil are beyond the control of Ghana which is a net importer of petroleum.
Crude oil and petroleum product prices in general are driven by "bullish or bearish speculations."
These speculations are usually generated from global supply and demand trends, Geopolitical events, state of the global
economy and strength of the US dollars which is the oil trading currency.
The USD/GHS exchange rate is directly under the policy control of Ghana through the Ministry of Finance, and is impacted by economic statistics like inflation rates, interest rates, current account/ Balance of Payments, Government debt, terms of trade and political stability and performance amongst others.
The impact of global supply and demand trends on prices are reflected first in demand and supply due to seasonality; petrol for instance is usually in high demand in the United States in the summer months (June to September) while diesel is usually in high demand in Europe in the winter months (October to March) prices of these products are increased in response to the increase in demand.
Secondly, a draw down or discussions surrounding a decision to draw down on oil reserves by countries with significant reserves especially the United States can significantly influence prices