Dr Patrick Ofori, Chief Executive of the Chamber of Bulk Oil Distributors (CBOD), stated that global supply chain disruptions caused by international conflicts have kept fuel prices high in Ghana.

Speaking on Citi Eyewitness News on Tuesday, June 16, Dr Ofori noted that the US-Israel war heavily contributed to fuel price increases over the past year. He indicated that without these conflict-driven disruptions, and based on current Bank of Ghana auction rates, fuel could be selling for at most GH¢9 to GH¢10 per litre.

Rising Costs and Logistics Disruptions

According to Dr. Ofori, international costs caused domestic pump prices to nearly double since January.

- Petrol prices increased by approximately 88%.

- Diesel prices increased by almost 100%.

The conflicts limited the movement of certain petroleum vessels and reduced overall shipping availability. This supply squeeze led to sharp increases in logistics costs:

- Freight Charges: The cost of chartering transport vessels to Ghana increased more than five-fold after the conflict began.

- Insurance Costs: Vessel insurance coverage premiums rose from about $3 million to as high as $17 million, with some insurers refusing to provide coverage entirely.

“From January, pump prices almost doubled. Petrol increased by about 88 percent, and diesel was almost 100 percent higher in terms of the price at which we were buying the products,” Dr Ofori stated.

“If there was no war, and looking at where the Bank of Ghana auction rate is today, we would be buying these products at around GH¢9 or GH¢10 at most.”

Supply Vulnerability and Reserves

Dr Ofori added that prolonged uncertainty caused suppliers and traders to secure products at premium rates. Some suppliers prioritized markets where they held existing retail networks and contractual obligations, forcing nations like Ghana to find alternative supply sources.

He highlighted that Ghana remains vulnerable to these international shocks because the country lacks a substantial strategic petroleum reserve. Establishing such stocks, he noted, requires dedicated long-term funding mechanisms, which other nations typically support through levies.

Market Outlook

The Chief Executive's remarks come alongside a recent drop in global oil prices following reports of a peace agreement between the United States and Iran. If this international downward trend persists, it is expected to bring relief to fuel prices in Ghana.