Difference between revisions of "Fuel Prices Ghana"

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{{Fuel Price Factsheet
 
{{Fuel Price Factsheet
 
|Fuel Price Country=Ghana
 
|Fuel Price Country=Ghana
 +
|Fuel Pricing Policies=Ghana liberalized fuel prices in Feb 2005 and began setting price ceilings in line with world prices. A price smoothing scheme called the ex-refinery differential, which operates like a price stabilization fund, was introduced in the last quarter of 2006 to pay fuel marketers for under-recovery of costs for selling kerosene, LPG, and premix (a heavily subsidized fuel for fishing boats). Government began reviewing prices twice a month in Oct 2007, but suspended price adjustments between May and Nov 2008. The frequency of price adjustments fell sharply beginning in 2009. There were no price adjustments in 2010, two price increases in 2011, and one downward price adjustment in 2012, with several of these adjustments tending to be large. A price increase of 30% for gasoline and diesel in Jan 2011 sparked street protests in Accra. Kerosene prices have been frozen since the end of Oct 2009. In addition, the controlled ex-refinery price of LPG has been markedly lower than the import-parity cost. In Nov 2011, the ex-refinery price differential was declared illegal, and the stay of execution was denied in Jan 2012. National Petroleum Authority (NPA) said in Feb 2012 that the fuel subsidy in 2011 was in excess of 450 million cedis (US$276 million). Ghana’s cabinet in Mar 2010 approved a Commodity Price Risk Management Policy, paving the way for hedging petroleum products and crude oil. Ghana hedged half of its crude oil requirements in 2010−11. In Jun 2011, the finance minister announced that government would hedge 100% of crude output and about half of crude purchase. IMF reported in Feb 2012 that sizable hedging gains in the first half of 2011 allowed fuel subsidies to be covered through July. In Jan 2012, government announced that it was hedging crude on a quarterly basis. The NPA posts detailed information on historical prices and price structures on its Web site. (Source:  Kojima, Masami. (2013, forthcoming). “Petroleum product pricing and complementary policies:Experience of 65 developing countries since 2009.” Washington DC: World Bank.)
 
|Fuel Currency=GHS
 
|Fuel Currency=GHS
 
|Fuel Price Exchange Rate=1.4183
 
|Fuel Price Exchange Rate=1.4183
 
|Fuel Price Exchange Rate Date=2010/11/17
 
|Fuel Price Exchange Rate Date=2010/11/17
|Fuel Price Last Updated=
 
 
|Fuel Price Composition=GIZ_IFP2012_Ghana1.png
 
|Fuel Price Composition=GIZ_IFP2012_Ghana1.png
 
|Fuel Price Composition Fuel Type=Gasoline 95 Octane
 
|Fuel Price Composition Fuel Type=Gasoline 95 Octane
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(** Subsidy across fuels: This value is only positive for gasoline and negative for all other fuels, i.e., the consumption of all other fuels is subsidized by the consumption of gasoline (the idea is to subsidize fuels mainly consumed by the poor))
 
(** Subsidy across fuels: This value is only positive for gasoline and negative for all other fuels, i.e., the consumption of all other fuels is subsidized by the consumption of gasoline (the idea is to subsidize fuels mainly consumed by the poor))
 
|Fuel Price Composition 2=GIZ_IFP2012_Ghana2.png
 
|Fuel Price Composition 2=GIZ_IFP2012_Ghana2.png
|Fuel Pricing Policies=The National Petroleum Authority (NPA) regulates fuel prices in Ghana by setting indicative maximum prices. The NPA is an autonomous and independent regulatory authority, consisting of representatives of the economy, the politics and the consuming public. The NPA offers comprehensive information on fuel price composition on their webpage.
+
|Fuel Matrix Pricing Mechanism=2
 
 
Until Dec 2010, prices had remained unchanged for 14 months (→Annex A1). The refinery prices were frozen, even in times of rising crude oil prices on the world market in 2010. In early January 2011, a considerable hike in fuel prices of 25-30% was announced. According to the NPA (see →Annex A1), this step was necessary due to rising crude oil prices. However, also some tax elements were increased (e.g. debt levy) as well as the retailer margin.
 
 
 
The debt recovery levy is used to retire considerable debts of the state-owned refinery. Those debts accumulated immensely over time, from the discrepancy between frozen selling prices and rising crude oil prices.
 
Since 2006, there is a pricing mechanism forcing the re-calculation of fuel prices whenever this discrepancy exceeds 2.5%. Therefore it is unclear how prices could soar instantaneously by 30% in Jan 2011 after 14 months of unchanged prices, instead of being increased gradually over several months. Has the formula been ignored during these 14 months period?
 
 
 
The Uniform Petroleum Price Fund (UPPF) Levy is used to offer uniform fuel prices across the country, in spite of deviating transportation costs (→ see 2.), i.e., the UPPF finances the transportation to rural areas.
 
A self-financing cross-subsidy among several fuels is used to lower prices for fuel types mainly consumed by the poor (e.g. gas oil, kerosene and premixed fuel, which is mainly used by fishermen).
 
 
 
→Some info taken from “Fuel Pricing in Ghana” by Charles Amoaty (GTZ 2006)
 
 
|Fuel Matrix Price Level=2
 
|Fuel Matrix Price Level=2
|Fuel Matrix Pricing Mechanism=2
 
 
|Fuel Matrix Annotation=ad-hoc-style pricing in 2010/Jan. 2011?
 
|Fuel Matrix Annotation=ad-hoc-style pricing in 2010/Jan. 2011?
  

Revision as of 15:05, 15 February 2013

Part of: GIZ International Fuel Price database
Also see: Ghana Energy Situation

Fuel Pricing Policies

Local Currency: GHS
Exchange Rate: 1.4183


(2010/11/17)

Last Update:

Ghana liberalized fuel prices in Feb 2005 and began setting price ceilings in line with world prices. A price smoothing scheme called the ex-refinery differential, which operates like a price stabilization fund, was introduced in the last quarter of 2006 to pay fuel marketers for under-recovery of costs for selling kerosene, LPG, and premix (a heavily subsidized fuel for fishing boats). Government began reviewing prices twice a month in Oct 2007, but suspended price adjustments between May and Nov 2008. The frequency of price adjustments fell sharply beginning in 2009. There were no price adjustments in 2010, two price increases in 2011, and one downward price adjustment in 2012, with several of these adjustments tending to be large. A price increase of 30% for gasoline and diesel in Jan 2011 sparked street protests in Accra. Kerosene prices have been frozen since the end of Oct 2009. In addition, the controlled ex-refinery price of LPG has been markedly lower than the import-parity cost. In Nov 2011, the ex-refinery price differential was declared illegal, and the stay of execution was denied in Jan 2012. National Petroleum Authority (NPA) said in Feb 2012 that the fuel subsidy in 2011 was in excess of 450 million cedis (US$276 million). Ghana’s cabinet in Mar 2010 approved a Commodity Price Risk Management Policy, paving the way for hedging petroleum products and crude oil. Ghana hedged half of its crude oil requirements in 2010−11. In Jun 2011, the finance minister announced that government would hedge 100% of crude output and about half of crude purchase. IMF reported in Feb 2012 that sizable hedging gains in the first half of 2011 allowed fuel subsidies to be covered through July. In Jan 2012, government announced that it was hedging crude on a quarterly basis. The NPA posts detailed information on historical prices and price structures on its Web site. (Source: Kojima, Masami. (2013, forthcoming). “Petroleum product pricing and complementary policies:Experience of 65 developing countries since 2009.” Washington DC: World Bank.)

Fuel Prices and Trends

Gasoline 95 Octane Diesel
in USD*

in Local Currency

* benchmark lines: green=US price; grey=price in Spain; red=price of Crude Oil



Fuel Price Composition

Price composition for one litre of Gasoline 95 Octane as of 2010/10/01.


GIZ IFP2012 Ghana1.png
GIZ IFP2012 Ghana2.png


Source: http://www.npa.gov.gh/petroleum-prices/ ; (see → Annex A2 for October 2010 values)

(* Unified Petroleum Price Fund: Supports fuel transportation to rural regions while maintaining a countrywide uniform pump price; the goal is to ensure the supply in all regions.)

(** Subsidy across fuels: This value is only positive for gasoline and negative for all other fuels, i.e., the consumption of all other fuels is subsidized by the consumption of gasoline (the idea is to subsidize fuels mainly consumed by the poor))



At a Glance

Regulation-Price-Matrix
Transparency of
Price Composition
Transparency of Pricing
Mechanism / Monitoring
IFPDB matrix background.png
IFPDB matrix point.png
IFPDB trafficlight green.png IFPDB trafficlight explanation.png IFPDB trafficlight yellow.png


ad-hoc-style pricing in 2010/Jan. 2011?

Statements are missing, when and why prices are re-calculated (why frozen prices for 14 months, followed by a 30% price hike?)


Sources to the Public

Type of Information Web-Link / Source
Price Composition http://www.npa.gov.gh/petroleum-prices/
Pump prices and margins http://www.npa.gov.gh/
Pump prices and margins http://www.npa.gov.gh/petroleum-prices/


Contact

Please find more information on GIZ International Fuel Price Database and http://www.giz.de/fuelprices

This is a living document. If you have any comments or suggestions, please feel free to contact us: Armin.Wagner@giz.de