Fuel prices may rise during the first pricing window of July due to escalating Middle East tensions, the Chamber of Petroleum Consumers (COPEC) has warned.
According to COPEC, the ongoing conflict between Iran and Israel, which has been exacerbated by recent U.S. airstrikes on three Iranian nuclear sites, is expected to have a significant impact on the world’s oil supply and, consequently, on nations that import fuel, such as Ghana.
Concerns of additional supply disruptions and price volatility have been raised by the prospect of Iran closing the Strait of Hormuz, a vital route that transports 20% of the world’s gas and oil.
Duncan Amoah, the Executive Secretary of COPEC, voiced his concerns about the possible impact on crude oil prices in an interview with Citi Business News.
In order to lessen the impact on Ghanaians, COPEC is advising consumers to prepare for potential hikes and urged policymakers to keep a careful eye on world events and implement mitigating measures.
“This week is likely to see a lot of activity on the international front as far as fuel pricing or petroleum pricing is concerned and Ghana clearly cannot be excused that possibility of paying more for fuel. What I see happening locally is that the BDCs may take a cue knowing well that it is riskier landing cargo than it was a week before due to the tensions on the strait and so I will not be surprised that in the course of the week some BDCs will adjust their prices upwards and once that happens some of the OMCs will clearly have to follow because they buy directly from the BDCs,” he said.
Although consumers found relief during the second June pricing window, Duncan Amoah does not anticipate that the trend will continue into the first July pricing window.
“Anytime crude oil prices go up, the net effect on prices of finished petroleum products is usually felt between 5-7 days and I am sure this new week prices globally as far as Platt is concerned would not come funny and so whatever the oil marketing companies should decide for the first window July to do…will probably need to be justified but I do think that clearly Ghanaians should expect upward adjustment in fuel prices due to the geopolitical across the Middle East,” he added.