Ghana fuel prices set to rise as global oil surge pushes up petrol and diesel costs

Motorists in Ghana are expected to pay significantzy more for fuel from August 1, with petrol, diesel and cooking gas prices all projected to rise as higher global oil prices and a weaker cedi drive up import costs.

The latest pricing outlook by the Chamber of Oil Marketing Companies (COMAC) forecasts increases across all major petroleum products for the pricing window running from 1 August to August 15.

Diesel is expected to record the sharpest increase, rising by 12.5% to about GH¢17.45 per litre. Petrol is projected to climb by 7.58% to around GH¢15.23 per litre, while Liquefied Petroleum Gas (LPG) could increase by 4.13% to GH¢16.40 per kilogram.

The anticipated increases come despite recent price adjustments by several Oil Marketing Companies (OMCs), with some analysts suggesting the impact on consumers may be less dramatic because many retailers have already increased pump prices in recent weeks.

The price hikes are expected to raise transport costs and add pressure to household budgets at a time when many Ghanaians remain sensitive to the cost of living.

NPA raises minimum fuel prices

Ahead of the new pricing window, the National Petroleum Authority (NPA) has revised the minimum prices at which fuel can be sold.

The new price floor for diesel has increased from GH¢14.35 to GH¢16.97 per litre, while petrol's minimum price has risen from GH¢13.28 to GH¢14.53 per litre. The approved price floor for LPG now stands at GH¢11.06 per kilogram.

The regulator reminded petroleum and LPG marketing companies that they are prohibited from selling products below the approved price floors, even amid competition in the retail market.

Global oil market driving increases

COMAC said the latest projections reflect a sharp increase in international crude oil prices and higher costs for refined petroleum products.

Average crude oil prices rose by 23.25% during the review period, climbing from US$71.90 to US$88.62 per barrel.

Diesel prices on the international market recorded the largest increase at 24.84%, followed by petrol at 12.58% and LPG at 12.24%.

The Chamber attributed the surge to heightened geopolitical tensions in the Middle East, including uncertainty surrounding the reopening of the Strait of Hormuz, renewed attacks on oil tankers and continued shipping restrictions.

It said concerns over supply disruptions have kept Brent crude trading close to US$88 per barrel, despite earlier hopes that diplomatic efforts could ease tensions.

Weaker cedi adds to pressure

COMAC also pointed to the depreciation of the Ghana cedi as a key factor behind the expected increases.

The exchange rate used for the latest pricing window weakened from GH¢11.4970 to GH¢11.6593 against the US dollar, representing a 1.41% depreciation.

Because Ghana imports refined petroleum products, a weaker local currency increases import costs, which are ultimately reflected in prices at the pump.

The latest adjustments are expected to place additional pressure on transport operators, businesses and households, with fuel costs likely to feed into broader inflation through higher transport and distribution expenses.