Gov’t extends GH¢2 diesel relief into September to ease pressure at the pumps

Government has extended the GH¢2 per litre cut on the regulatory margin on diesel into the first pricing window of September, in a move to protect consumers from a further hike in fuel prices.

The relief, which was introduced on August 4 as a temporary measure for two pricing windows, was due to end in August. Citi Business News understands government has decided to keep it for another window, instead of restoring the full GH¢2 margin.

The extension is expected to bring relief to drivers, commercial transport operators and businesses, at a time diesel is already selling at about GH¢17 per litre at most pumps.

The Chamber of Petroleum Consumers (COPEC) had called for the extension, warning that ending it would push diesel to nearly GH¢20 per litre.

Executive Secretary, Duncan Amoah, said government itself was uncomfortable with that prospect and appealed for the intervention to be maintained.

“Government originally had indicated it was going to do that for just two window periods, which is a month. We would want to plead that at least the next two weeks be considered again. Already diesel is around GH¢17 a litre for most of the OMCs. Allowing the GH¢2 to come back would mean we will be doing GH¢19, approaching GH¢20 a litre. That situation I think the government itself is uncomfortable for,” he said.

COPEC has also projected a general increase in fuel prices from September 1, driven by a nearly 10% rise in international prices of petrol in the last two weeks.

“Fuel prices are likely to inch up from the first window September. Petrol most likely, since it’s done almost 10% to close trading over the past two-week window, and decisions that our prices would go up,” Mr Amoah added.[are]

Government first introduced the margin reduction to cushion consumers after global oil prices surged following rising tensions in the Middle East since February.

Extending it into September is expected to limit the impact of high world market prices on diesel users and prevent a sharp rise in transport and business operating costs, which often feed into the prices of goods and services.