The government must pay heed to the early warnings about a possible crude oil price increase.
Oil markets roared last week and the price of oil has hit a 10-month high due to a production cut by OPEC led by Saudi Arabia with their allies including Russia.
The price of crude oil for the first time this year climbed up to $90 per barrel.
According to Saudi Arabia the voluntary output cuts of 1.66 million barrels per day (bpd) on top of the existing two million barrels per day cuts by OPEC were made as a precautionary measure aimed at supporting market stability.
Hence, they have extended the supply and export cuts until December 2023. They attributed their decision to weak global economic conditions. China the number one importer of crude has not experienced the economic rebound expected after the COVID19 pandemic.
Unless the government was strategic and signed a long term contract with a reliable supplier of fuel when the prices were favourable, Ghanaians could be facing higher prices of fuel at the pump. We sounded the alarm to the government to take advantage of the low price conditions and secure a long term supply for the country.
However, if those cautions were not heeded to, Ghanaians should fasten their seat belts and get ready for another painful trips to the pump.
With the recent commissioning of the Jubilee South East (JSE) project, Ghana’s crude oil production is on track to increase from 70,000 to 100, 000 barrels per day. But until we are willing to have our cake and eat it too, we will never enjoy the benefits of our crude oil at the pump.
Gold for Oil (GFO) policy can only help shelter our local currency and keep the dollar in charge. The price hike is purely supply and demand dynamics.
There’s a supply deficit of 3.4 million barrels of crude oil per day globally due to the production cuts by OPEC+. As a result crude oil price is on the rise.