Accra: Fuel Prices Set to Increase, Potentially Affecting Food Costs Again

Market analysts are forecasting another hike in fuel prices starting today, Tuesday, July 16, as the second pricing window opens. This increase, estimated to be up to 4%, comes amid high food inflation and could further strain the transportation of goods, particularly farm produce, from farms to market centers.

The Chamber of Petroleum Consumers (COPEC) has forecasted a 4% hike in petroleum product prices. According to COPEC, retail prices for Petrol, Diesel, and LPG are set to rise due to the further depreciation of the cedi against the dollar, from $1: GH¢15.2779 in the previous pricing window to $1: GH¢15.462. Major oil marketing companies may sell Petrol at GH¢14.795 per liter, Diesel at GH¢15.332 per liter, and LPG at GH¢16.205 per kilogram, with a 14.5 kg cylinder reaching GH¢234.97.

Some companies, however, might maintain or slightly increase their prices to attract customers.

This marks the second fuel price increase in July, which could lead to agitation among commercial transport operators for fare hikes. The last transport fare increase occurred in April, ranging between 15% and 20%, which significantly impacted transportation costs and resulted in the transport sector posting the highest month-on-month inflation rate of 10.6% in May, affecting the overall cost of goods and services.

Even without a general fare increase for commercial transport, haulage trucks transporting goods, particularly food items, are likely to charge higher prices. This could further elevate food prices, which are already experiencing high inflation rates.

In June, locally produced items had higher inflation rates, with 18 of the top 20 items with the highest inflation rates being locally produced. Common vegetables like okro, pepper, tomatoes, onions, and cabbage recorded inflation rates exceeding 50%.

These significant price increases in food and other locally produced items could be exacerbated by another round of fuel price hikes, as predicted by COPEC and other market analysts.