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Ghana News

Possible pain at the pump in forecast

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The administration must heed the early cautions over a potential rise in the price of crude oil.

Due to a production reduction by OPEC led by Saudi Arabia alongside its allies, including Russia, last week, the oil markets erupted and the price of oil rose to its highest level in 10 months.

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For the first time this year, the price of crude oil increased to $90 a barrel.

The voluntary production cuts of 1.66 million barrels per day (bpd), on top of the two million barrels per day cutbacks already announced by OPEC, were reportedly implemented as a preventative move to ensure market stability.

As a result, the supply and export restrictions have been extended until December 2023. They justified their choice by citing the faltering state of the world economy. China, the top oil importer, has not enjoyed the COVID19 economic recovery that was anticipated.

Ghanaians may see increased fuel costs at the pump unless the government was smart and entered into a long-term deal with a dependable fuel supplier when the pricing were favorable. We warned the administration to seize the opportunity of the low pricing circumstances and guarantee a long-term supply for the nation.

But if such warnings go unheeded, Ghanaians should buckle up and be ready for more grueling visits to the gas station.

Ghana’s crude oil output is on pace to rise from 70,000 to 100,000 barrels per day with the recent activation of the Jubilee South East (JSE) project. But unless we are ready to compromise, we will never get to enjoy the advantages of our crude oil at the pump.

The Gold for Oil (GFO) strategy can only serve to protect our local currency and maintain the dominance of the dollar. Only supply and demand dynamics can explain the price increase.

Due to OPEC+’s production restrictions, there is a daily shortage of 3.4 million barrels of crude oil in the world. The price of crude oil is rising as a result.

 

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