Fuel prices may drop between 3% and 6% from August 1 – COPEC

Prices of petroleum products may go down between 3 per cent and 6 per cent from August 1, 2022.

According to the Chamber of Petroleum Consumers (COPEC), the expected reduction would have been bigger if not for the depreciation of the cedi against the U.S dollar.

The drop in fuel prices will be the second consecutive time since oil prices started falling on the world market.

“What, we picked from the market for the first window of August [2022] is an indication that prices at the pumps should have gone down significantly. The unfortunate thing at this point happens to be with the currency [cedi]. As I speak with you, over the two weeks window, the FX has seen some depreciation, from about ¢8.30 to about ¢8.90 pesewas currently”, Executive Secretary of COPEC, Duncan Amoah, disclosed.

“And so that could on its own erode the reductions that you and I could have seen at the various pumps”, he added.

Mr Amoah urged the government to take a second look at the deregulation policy to cushion consumers against the high fuel prices.

“We have said on a good number of occasions, that the earlier we take a second look at this whole regulation programme, the better it would be”.

Meanwhile oil prices on the international market rose more than $1 a barrel yesterday, extending gains from the previous session, buoyed by improved risk appetite among investors as lower crude inventories and a rebound in gasoline demand in the United States supported prices.

Brent crude futures for September rose $1.13, or 1.1 per cent, to $107.75 a barrel after gaining $2.22 on Wednesday.

US West Texas Intermediate crude (WTI) was at $98.53 a barrel, up $1.27, or 1.3 per cent, after rising $2.28 in the previous session.

“Risk sentiment has recovered from recession fears due to the ongoing US earnings optimism and less aggressive Fed rhetoric on rate hikes, which supported a rally in the crude market,” CMC Markets analyst Tina Teng said, adding that a weakened US dollar has also lifted commodities prices.

The US Federal Reserve raised its benchmark overnight interest rate by three-quarters of a percentage point, in line with expectations, to cool inflation, while the dollar fell on hopes for a slower hiking path.

A weaker dollar makes oil, priced in dollars, cheaper for buyers in other countries to purchase.

On supplies, US crude oil stockpiles fell by 4.5 million barrels last week, against expectations of a 1 million-barrel drop, while US gasoline demand rebounded by 8.5 per cent week on week, data from the Energy Information Administration showed.

“The US consolidated its position as the world’s largest petroleum exporter,” Citi analysts said in a note, as combined gross exports of crude oil and refined products stood at a record 10.9 million barrels a day.

US crude exports reached a record 4.5 million bpd as WTI traded at a steep discount to Brent, making purchases of US crude grades more attractive to foreign buyers.

Prices also found support as the Group of Seven richest economies aims to have a price-capping mechanism on Russian oil exports in place by December 5, a senior G7 official said on Wednesday.

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