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Monday(June,15 2015)

PETROLEUM MINISTRY PRESENT GHC1.45M TO SUPPORT FLOOD, FIRE VICTIMS

The Ministry of Petroleum on Thursday donated GHC1, 450,000 to be used towards the purchase of relief items to be distributed by the National Disaster Management Organisation (NADMO) among victims of the June 3, flood and fire disaster in Accra.

Contributed by four subsidiary agencies under the ministry namely; National Petroleum Authority (NPA), Ghana National Petroleum Corporation (GNPC), Bulk Oil Storage and Transportation (BOST) and Ghana Oil (GOIL), it was also meant to help ease the suffering of the people.

Commenting, the Petroleum Minister, Emmanuel Armah-Kofi Buah who led a delegation from the sector said that the devastating effects of the floods needed joint efforts, hence the gesture to help those affected.

While commiserating with the bereaved families and the affected, he reemphasized the ministry’s pledge to assist in any possible way to ease the pain on various fronts as a result of the national tragedy.

Receiving the cheque, the National Coordinator of NADMO, Brigadier-General Francis Vib-Sanziri said the tragic event of June 3, directly or indirectly affected all Ghanaians.

He said it was, therefore, important for all Ghanaians to form a united front to address all challenges that had emanated from the tragic event.

The NADMO boss said he would continue working with government and other partners to ensure safe passage and distribution of supplies to the affected communities.

Also present at the ceremony were the Chief Executive Officer of NPA, Moses Asaga, the Managing Director of BOST, Kingsly Kwame Awuah-Darko and  Senyo Hosi, CEO of Ghana Chamber of Bulk Oil Distributors.
Thursday(June,11 2015)

PETROLEUM MINISTER INSPECTS FILLING STATIONS IN ACCRA

The Minister of Petroleum, Emmanuel Armah   Kofi Buah, has urged filling station managers to constantly provide training for filling station attendants. This, he says, will enable them to upgrade their skills and expertise on safety standards in order to forestall any disaster.

He also asked the National Petroleum Authority (NPA) to go beyond periodic inspections of safety standards and ensure that filling stations do not compromise on safety standards on daily basis.
The minister said this when he visited some filling stations in Accra to ensure that their operations met the required standards set by the NPA.

He was accompanied on the tour by officials of the NPA including the Chief Executive, Moses Asaga and the Chief Inspector of the Authority, Esther Anku.

The stations they visited were the Total Filling Station opposite the La Palm Hotel at La, and the Goil  Filling Station at the 37 Military Hospital.

The visit came in the wake of the explosion in the midst of the flood at the Goil Filling Station at Circle on June 3 which led   to the death of over 100 people and injuries to others who had sought shelter at the filling station, as well as damage to properties wealth million of cedis.

Though the cause of the explosion is yet to be established, it is believed that safety standards may have been compromised, resulting in the inferno in the midst o f the heavy rain pour.

Mrs Anku briefed the minister at the filling stations on the safety standards inspection check list which is used by the NPA to score the filling station on general information about the filling station, underground storage tanks, and regulatory requirements such as Environmental Protection Agency Permit, NPA Licensing Permit and Ghana Standards Authority Permit.

Other requirement on the check lists are technical requirements such as distance of the outlet from medium and high voltage lines, conditions of dispensing nozzles, infrastructure requirements, waste management storage and disposal, pollution prevention and control, occupational health and safety and other housekeeping duties.

Even  though  the fillings stations visited appeared to have met the requirement, Mr Buah stressed on the need to go beyond the regular  by ensuring that on daily basis they complied with the standards and not only  during official visits.

Mr Buah said the ministry together with the NPA were “taking a second look” at the safety regime for filling stations to ensure that “we identify lapses in the current regime so that we tighten the loose ends so that we do not compromise on safety.”

He said the ministry was working with other agencies and stakeholders to adopt a “coordinated approach” in addressing safety standards at filling stations to avoid any further disasters.

Mr Buah advised the workers at the filling station to strictly adhere to the safety standards adding “you need to have on daily basis all the things you need in your operations so that we do things right there should be no excuses.”

Mr Asaga assured that the NPA had a “robust safety standards” as a regulatory authority and would not compromise in its monitoring role to ensure that the filling stations adhere to the standards.
Tuesday(June,02 2015)

Govt to wash hands off pricing of petroleum products

The government has decided to wash its hands off the pricing of petroleum products.

This means that the Bulk Oil Distribution Companies (BDCs) and Oil Marketing Companies (OMCs) will, before August 2015, price their own products.

The strategy, which is the final phase of Ghana’s petroleum downstream deregulation policy, will result in the cessation of subsidies on fuel products.

The government’s indebtedness to the BDCs as a result of subsidies currently stands at more than $800 million.

The Chief Executive of the National Petroleum Authority (NPA), Mr Moses Asaga, in an interview with the Daily Graphic in Accra Monday, clarified that “the increment or decrease of petroleum prices will no longer be the preserve of the government but will be determined by market forces that will take into consideration the international price of crude oil, the foreign exchange rate, the fall or rise of the cedi, import duties, taxes and other factors.

“This means the government will no longer be involved in the pricing of petroleum products and therefore the perennial issue of subsidies will come to an end,” he said.

Rationale

Explaining the rationale behind the liberalisation of the petroleum downstream sector, Mr Asaga told the Daily Graphic that the full implementation of the deregulation of the petroleum downstream sector would promote competition among market players.

“Prices will vary and will be lower because the BDCs and the OMCs will be competing with one another for a wider market share. The petroleum downstream sector will in no time turn out like the telecoms sector, where there is so much healthy competition.

“The issue of colossal subsidies which put a huge financial burden on the government, he said, would also end and thereby result in the re-channeling of finances into other sectors of the economy, Mr Asaga said.

Timeline

Mr Asaga did not give a specific date by which the new policy would be implemented but said it would be implemented before August 2015.

According to him, the NPA was currently holding meetings with stakeholders, including the BDCs, the OMCs and transporters.

“We have met the BDCs and scheduled a meeting with the OMCs this week. Some portions of the NPA Act will have to be slightly amended to contain the new situation or pricing,” he said

Sanctions

Touching on moves to ensure that consumers were not short-changed, he said: “There will be sanctions on BDCs and OMCs that will go beyond the average price indicated. The punishment will be the suspension of operating licences. In the event that the quality of products is found to have been compromised, it will result in the withdrawal of licences after a third warning.”

He said the Petroleum Product Market Scheme (PPMS) Unit, which was set up at the NPA two years ago, “will be strengthened to become a very strong department in the new dispensation to further do away with incidents of adulteration and sale of inferior products.

“The failure rate or quality, which used to be 30 per cent of product quality, has been reduced to two per cent since the introduction of the PPMS. We will tighten it to 0.5 or 0.1 per cent,” he added.

Debt

On the debt the government owed the BDCs, Mr Asaga said, “We hope to isolate this debt and deal with it once and for all.”

He said Nigeria was currently facing acute fuel shortage because of debts the government owed the BDCs there, adding that in the case of Ghana, “we have managed the system prudently to forestall product shortages so far”.

Control

He explained that Cabinet was aware of the new measure and further indicated that there were checks and balances in place to ensure that the interests of consumers were protected.

“The NPA will make sure that prices quoted by the BDCs and the OMCs are within the approved and expected ranges. We will make sure they do not take undue advantage of the consumer.

“Each OMC will have to indicate its ex-pump price and it is expected to submit it to the NPA for publication. This will enable consumers to have a choice, depending on the price of products,” he said.

Quality

Asked how the NPA would ensure that the quality of products was not compromised, Mr Asaga said: “The NPA will tighten its quality control measures to ensure that the inspection and testing of petroleum products meet the standard specification of the NPA and the Ghana Standards Authority (GSA) before they are discharged at the port.”

History

The deregulation of the petroleum downstream sector started with the establishment of the NPA, which decided to deregulate the industry that used to be controlled by the Tema Oil Refinery (TOR), the Bulk Oil Storage and Transportation (BOST) Company Limited, the Ghana National Petroleum Corporation (GNPC) and a few multinational companies.

The BDCs were introduced in the process. 

They were initially four, but the number has now increased to 27.

The OMCs, which were less than 10 some decades ago, have increased to 120, out of which 70 per cent control the retail market.
Thursday(May,21 2015)

NPA FREEZES OPENING OF NEW FUEL STATIONS

  The National Petroleum Authority (NPA) has suspended the issuance of permits for the construction of new retail outlets for petroleum products across the country.

This is because the NPA is in the process of auditing the permits issued to various petroleum service providers (PSPs) to construct petroleum product retail outlets and LPG refilling plants.

The suspension takes retroactive effect from May 1, 2015.

Speaking at this year’s petroleum downstream industry meeting held in Accra, the Chief Executive Officer (CEO) of the NPA, Mr Moses Asaga said “the audit will culminate in the revision of the requirements for the grant of construction permits for such facilities”.

He explained that “the suspension will affect all applications submitted to the authority from the said date.
Applications that were received before May 1, 2015, but had incomplete documentation will be affected by the suspension.”

Mr Asaga told the packed room that the rationale behind the new directive was to ensure that sanity prevailed in the operations of PSPs.

“The growing numbers of filling stations in the country has to be looked at again. Presently there is an uneven spread of filling stations in some parts of the country. Take the northern border towns for instance, between Paga and Bolgatanga, there are 20 filling stations alone and we all know that there are no massive commercial activities in those towns,” he said.

Asked how long the suspension will be in force, Mr Asaga said the timeline was not known immediately. 
“We are in talks with the Centre for Remote Sensing and Geographic Information Services (CERSGIS) to complete a map of filling stations and their respective locations. 

We currently have the co-ordinates of all existing filling stations and are in the process of developing them into geographic information systems with pictorial maps of the retail outlets,” the CEO of NPA said. 

Those measures, he said, would inform the NPA to take the necessary measures to prevent the proliferation of filling stations in certain areas. 

He said it was important for the NPA to take stock of the activities of PSPs to ensure all laws were complied with.

According to Mr Asaga, the safety of Ghanaians was also taken into consideration before arriving at that decision.

“The NPA had sent a circular to all stakeholders on the new decision and would duly inform them when the exercise ends,” he said.

Touching on other issues, Mr Asaga commended “each and every one of the industry players for their role in sustaining our industry in the past year despite the numerous challenges.

The BDCs and BOST have held the fort in ensuring products importation to cover TOR production challenges, the transporters have efficiently distributed products especially in times of shortages, and the OMCs have improved upon the delivery of quality products much more efficiently at the pump.”
Sunday(May,10 2015)

NPA ORGANISES BLOOD DONATION EXERCISE

The National Petroleum Authority (NPA) has organised a blood donation exercise at its head office in Accra.

The programme was undertaken in collaboration with the National Blood Service at Korle-Bu Teaching Hospital, to stock the hospital’s blood bank.

More than 40 members of workers of NPA voluntarily donated blood after the necessary medical checks had been performed on them.

Speaking to the media, the Public Relations and Consumer Service Manager of the National Petroleum Authority, Yaro Kasambata, said the exercise was the maiden one by the Authority and was aimed at encouraging people to donate blood to the National Blood Service to save lives.

“We want to donate to save lives. We have estimated 60 volunteers and if by the end of the day we are able to receive 30 to 40 pints of blood, that will be a tremendous success,” he said

Mr. Kasambata indicated that the exercise would be made an annual affair.

He added that the exercise was part of activities to mark the 10th anniversary celebration of NPA in June, 2015 and encouraged the public to make blood donation a habit and part of their lifestyle.

A principal blood donor recruiter of the National Blood Service, Mr David Dodzi Ahiadzro, told the DownstreamToday that his outfit was in dire need of blood.

According to him, “demand outweighs supply. Our target of 250,000 per annum has never been met.

The closest we get to is 38 per cent voluntary donation which translates to about 85,000 units of blood.”

Mr. Ahiadzro commended NPA for the initiative, urging other organisations to emulate their example to help save lives.

“Although the expected units of blood were not met, the exercise was successful”, he added.
 
Source: PR/CS
Wednesday(May,06 2015)

OPENING OF ZONAL OFFICE AT HO IN THE VOLTA REGION

The National Petroleum Authority (NPA) wishes to inform all Petroleum Service Providers (PSPs), other stakeholders and the general public that it has opened a Zonal Office at Ho to serve the Volta Region as well as the southern parts of the Northern region from Bimbila through Wulensi up to Salaga catchment area.

This initiative is part of the Authority’s medium-term strategic plan to decentralize its operations, increase its regional presence and bring its activities to the doorsteps of all within the zone.
 
The core activities of the Volta Zonal Office shall include but not be limited to:
  1. Site inspections of applicants seeking construction permits
  2. Monitoring the quality of petroleum products at retail outlets
  3. Inspections and monitoring of the facilities of PSPs
  4. Investigations into complaints by consumers etc. 
 
The Volta Zonal Office can be located at:
3rd Floor, Gerco Plaza
Independence High Street
Opposite SG-SSB Bank
Hliha Ho, Volta Region
Tel: 0362028975
 
We therefore advise all to relate to the office with respect to the core activities listed above.
 
ISSUED BY THE NATIONAL PETROLEUM AUTHORITY

MOSES ASAGA

(CHIEF EXECUTIVE)
Friday(March,20 2015)

GHANA'S FUEL IS THE FINEST IN THE SUB-REGION – NPA

The National Petroleum Authority (NPA) has said that its stringent measures aimed at improving upon the quality standard of fuel sold in the country has ensured that Ghanaians enjoy the finest petroleum products in the West African sub-region.

In achieving that, it said the Authority adopted strategies such as the revision of operating procedures in the importation and production of fuels for local consumers and the recently introduced Petroleum Product Marking Scheme (PPMS).

The Public Relations and Consumer Service Manager of the NPA, Yaro Kasambata announced this at an event in Accra organized by Consumer Unity and Trust Society International (CUTS) Accra to mark this year’s World Consumer Rights Day.

Mr. Kasambata said the PPMS programme by the NPA uses cutting edge technology and ultra-modern laboratory, the only one of its kind in West Africa.

“The programme also undertakes round the clock inspections of fuel stations across the country to guarantee the integrity of fuel sold on the market.”

Mr. Kasambata cautioned consumers and advised them to refrain from buying fuel from non-licensed and unregulated sources.

Speaking on the theme: “It is time to pass the consumer protection law”, Justice S. K. Date-Bah, retired Justice of the Supreme Court of Ghana and Board Chair, CUTS Accra said Ghana has the capacity to build a vibrant consumer regime.

He stressed that CUTS Accra should stay true to its mandate of promoting consumer welfare. He further urged the organization aims to create a long-term partnership with government agencies and regulatory authorities to work towards protecting the welfare of the Ghanaian consumers.

Present at the forum were representatives from other regulatory agencies such as the National Communication Authority, Ministry of Trade, Ghana Standards Authority and Food and Drugs Board.
Wednesday(February,25 2015)

NPA PAYS ARREARS TO BDCs

 

The Chief Executive Officer of the National Petroleum Authority (NPA), Mr Moses Asaga, has said that the authority has settled the GH¢412 million debt it owed the Bulk Oil Distribution Companies (BDCs).

The settlement followed money the authority got from over-recoveries when the prices of petroleum products dropped on the world market.

In an interview with the Daily Graphic, Mr Asaga said with the drop in the price of crude oil on the world market, the NPA had successfully paid off its indebtedness of GH¢412 million to the BDCs through over-recoveries.

He explained that the over-recoveries became possible through the decision of the authority to implement a balancing act that saw a cumulative reduction in the prices of petroleum products by 12 per cent which was lower than what Ghanaians had expected.

Decision not to reduce prices unpleasant but..

Unpleasant as the decision may have been for Ghanaians, he said, the amount owed the BDCs which was as a result of under-recoveries arising from the government subsidising the prices of petroleum products in the past posed a threat to the financial health of the BDCs.

That, he said, was because the debt had created a financial crunch for the BDCs who had to rely on banks for support adding that with their indebtedness to the banks, there was no way the banks would have given them any additional funds to import crude.

If that had happened, he said, it would have led to shortages in the supply of petroleum products and so to ensure a regular supply, the authority had to use part of the windfall to pay the BDCs.

The NPA’s indebtedness to the BDCs as of July 2014, he said, stood at GH¢412,005,982 adding that payments of the amount began from August 2014.

“As of January 31, 2015, all outstanding debts owed the BDCs had been cleared,” Mr Asaga told the Daily Graphic.

Hedge policy to protect Ghanaian consumers

He announced that the NPA would from Sunday, March 1, 2015, implement a hedge policy for petroleum products as a move to insulate Ghanaians from having to pay more in the event that world prices of those products escalated.

The price of crude  oil at the world market fell to a record low of $ 46 but in recent weeks, the price has inched up to about 64 dollars thereby raising fears that it might climb higher.

A hedge is like an insurance policy that insulates consumers from paying prevailing prices when prices move from a previous low rate to a higher one.

The downside to the hedging policy is that, in the event that prices fall lower, the country will not enjoy any windfall.

Mr Asaga explained that with the price of crude oil moving from $46 to $60, the over-recoveries that came to the authority reduced by a third from GH¢65 million to GH¢24 million.

The government, he said, was putting in place a mitigating account into which the over-recoveries, following the settlement of the indebtedness to the BDCs, would be paid.

“Accruals in that account would then be used to cushion consumers in the event of prices going up,” he said.

“But with prices rebounding, we cannot do that again and have to resort to other means,” he said.

The hedging, he said, would safeguard consumers from price volatility on the world market adding that the NPA was hoping that prices would go up to $70 per barrel and that any increase beyond that had to be hedged.

He explained that with the hedge policy, even if prices of petroleum products should cross the $70 mark, Ghanaians would not experience any further change in the ex-pump price.

- See more at: http://graphic.com.gh/news/general-news/39177-npa-pays-arrears-to-bdcs.html#sthash.BOhznHKr.dpuf

The Chief Executive Officer of the National Petroleum Authority (NPA), Mr Moses Asaga, has said that the authority has settled the GH¢412 million debt it owed the Bulk Oil Distribution Companies (BDCs).

The settlement followed money the authority got from over-recoveries when the prices of petroleum products dropped on the world market.

In an interview with the Daily Graphic, Mr Asaga said with the drop in the price of crude oil on the world market, the NPA had successfully paid off its indebtedness of GH¢412 million to the BDCs through over-recoveries.

He explained that the over-recoveries became possible through the decision of the authority to implement a balancing act that saw a cumulative reduction in the prices of petroleum products by 12 per cent which was lower than what Ghanaians had expected.

Decision not to reduce prices unpleasant but..

Unpleasant as the decision may have been for Ghanaians, he said, the amount owed the BDCs which was as a result of under-recoveries arising from the government subsidising the prices of petroleum products in the past posed a threat to the financial health of the BDCs.

That, he said, was because the debt had created a financial crunch for the BDCs who had to rely on banks for support adding that with their indebtedness to the banks, there was no way the banks would have given them any additional funds to import crude.

If that had happened, he said, it would have led to shortages in the supply of petroleum products and so to ensure a regular supply, the authority had to use part of the windfall to pay the BDCs.

The NPA’s indebtedness to the BDCs as of July 2014, he said, stood at GH¢412,005,982 adding that payments of the amount began from August 2014.

“As of January 31, 2015, all outstanding debts owed the BDCs had been cleared,” Mr Asaga told the Daily Graphic.

Hedge policy to protect Ghanaian consumers

He announced that the NPA would from Sunday, March 1, 2015, implement a hedge policy for petroleum products as a move to insulate Ghanaians from having to pay more in the event that world prices of those products escalated.

The price of crude  oil at the world market fell to a record low of $ 46 but in recent weeks, the price has inched up to about 64 dollars thereby raising fears that it might climb higher.

A hedge is like an insurance policy that insulates consumers from paying prevailing prices when prices move from a previous low rate to a higher one.

The downside to the hedging policy is that, in the event that prices fall lower, the country will not enjoy any windfall.

Mr Asaga explained that with the price of crude oil moving from $46 to $60, the over-recoveries that came to the authority reduced by a third from GH¢65 million to GH¢24 million.

The government, he said, was putting in place a mitigating account into which the over-recoveries, following the settlement of the indebtedness to the BDCs, would be paid.

“Accruals in that account would then be used to cushion consumers in the event of prices going up,” he said.

“But with prices rebounding, we cannot do that again and have to resort to other means,” he said.

The hedging, he said, would safeguard consumers from price volatility on the world market adding that the NPA was hoping that prices would go up to $70 per barrel and that any increase beyond that had to be hedged.

He explained that with the hedge policy, even if prices of petroleum products should cross the $70 mark, Ghanaians would not experience any further change in the ex-pump price.

- See more at: http://graphic.com.gh/news/general-news/39177-npa-pays-arrears-to-bdcs.html#sthash.BOhznHKr.dpufThe Chief Executive Officer of the National Petroleum Authority (NPA), Mr Moses Asaga, has said that the authority has settled the GH¢412 million debt it owed the Bulk Oil Distribution Companie
The Chief Executive Officer of the National Petroleum Authority (NPA), Mr Moses Asaga, has said that the authority has settled the GH¢412 million debt it owed the Bulk Oil Distribution Companies (BDCs).

The settlement followed money the authority got from over-recoveries when the prices of petroleum products dropped on the world market.

In an interview with the Daily Graphic, Mr Asaga said with the drop in the price of crude oil on the world market, the NPA had successfully paid off its indebtedness of GH¢412 million to the BDCs through over-recoveries.

He explained that the over-recoveries became possible through the decision of the authority to implement a balancing act that saw a cumulative reduction in the prices of petroleum products by 12 per cent which was lower than what Ghanaians had expected.

Decision not to reduce prices unpleasant but..

Unpleasant as the decision may have been for Ghanaians, he said, the amount owed the BDCs which was as a result of under-recoveries arising from the government subsidising the prices of petroleum products in the past posed a threat to the financial health of the BDCs.

That, he said, was because the debt had created a financial crunch for the BDCs who had to rely on banks for support adding that with their indebtedness to the banks, there was no way the banks would have given them any additional funds to import crude.

If that had happened, he said, it would have led to shortages in the supply of petroleum products and so to ensure a regular supply, the authority had to use part of the windfall to pay the BDCs.

The NPA’s indebtedness to the BDCs as of July 2014, he said, stood at GH¢412,005,982 adding that payments of the amount began from August 2014.

“As of January 31, 2015, all outstanding debts owed the BDCs had been cleared,” Mr Asaga told the Daily Graphic.

Hedge policy to protect Ghanaian consumers

He announced that the NPA would from Sunday, March 1, 2015, implement a hedge policy for petroleum products as a move to insulate Ghanaians from having to pay more in the event that world prices of those products escalated.

The price of crude oil at the world market fell to a record low of $ 46 but in recent weeks, the price has inched up to about 64 dollars thereby raising fears that it might climb higher.

A hedge is like an insurance policy that insulates consumers from paying prevailing prices when prices move from a previous low rate to a higher one.

The downside to the hedging policy is that, in the event that prices fall lower, the country will not enjoy any windfall.

Mr Asaga explained that with the price of crude oil moving from $46 to $60, the over-recoveries that came to the authority reduced by a third from GH¢65 million to GH¢24 million.

The government, he said, was putting in place a mitigating account into which the over-recoveries, following the settlement of the indebtedness to the BDCs, would be paid.

“Accruals in that account would then be used to cushion consumers in the event of prices going up,” he said.
“But with prices rebounding, we cannot do that again and have to resort to other means,” he said.

The hedging, he said, would safeguard consumers from price volatility on the world market adding that the NPA was hoping that prices would go up to $70 per barrel and that any increase beyond that had to be hedged.

He explained that with the hedge policy, even if prices of petroleum products should cross the $70 mark, Ghanaians would not experience any further change in the ex-pump price.

Source: Daily Graphic
Tuesday(February,24 2015)

OIL MARKET NEWS (WEEK 7): WEEK ENDED FEBRUARY 20, 2015

 Major Highlights
  • Weekly average Brent crude oil price rises for the fifth consecutive week.
  • The weekly average GHS/USD rate depreciates by 1.21% when compared to the previous week.
  • First vessel picks up oil from Libyan port of Hariga for exports.
  • Ghana’s current stock of diesel decreases; petrol increases when compared to the previous week.
  • Total U.S commercial petroleum inventories decreased by 0.8 million barrels last week.
  • Japan’s crude oil imports fell by 7.2% in January 2015.
  • Saudi Arabia’s oil production rises to about 10.0 mb/d – PIRA.
Average Dated Brent price for the week (published by Platts) increased by $3.64 to $60.32 per barrel from the previous week's average of $56.69 a barrel, indicating 6.42% increase.

Weekly average Brent crude oil price increased for the fifth consecutive week, to its 2015 high, supported by threats to Middle East supplies and expectations lower prices may prompt a slowdown in U.S. output.

"The oil price is finding additional support from renewed greater perception of the risks to supply," said Carsten Fritsch, analyst at Commerzbank. "In the short term, the momentum suggests that prices will climb further."

In the course of the week, Brent crude oil price rise was capped after another big weekly build in U.S. crude inventories and a possible rise in Saudi output stoked worries about oversupply. "The inventories were the trigger for the sharp correction lower," Carsten Fritsch, an oil analyst at Commerzbank in Frankfurt, said. "The focus is again back on the oversupply - the big question is for how long?"

Free on board (FOB) prices of petrol increased by $8.20 to $571.65/MT from the previous week's average of $563.45, indicating 1.46% increase; diesel increased by $10.75 to $565.40/MT from the previous week’s average of $554.65, indicating 1.94% increase; and LPG increased by $24.70 to $460.75/MT from the previous week’s average of $436.20, indicating 5.66% increase, during the period under review.

The average GHS/US Dollar exchange rate depreciated when compared to the previous week. The depreciation of the Ghana Cedi against the USD, increased the contribution of the exchange rate in the Price Build-Up. The GHS/US Dollar exchange rate for the period 16th February 2015 to 20th February 2015 was 3.4027 compared to 3.3619 during the previous week (1.21% depreciation).

The GHS equivalent of FOB prices for petrol, diesel and LPG increased by 2.69%, 3.18% and 6.94% respectively, during the same period under review.

Geopolitics

A tanker has loaded 600,000 barrels of crude from storage at the Libyan port of Hariga, an energy official said on Wednesday, the first vessel to pick up oil for export from the country in more than a week.

The official said crude supplies from the Sarir oilfield, which flow to Hariga for export, remained disrupted following a pipeline blast, with repairs and maintenance expected to take a number of days.

In another development, a top economist at the International Energy Agency (IEA) said the rise of the Islamic State (IS) in Iraq and Syria presents a major challenge for the investment necessary to prevent an oil shortage in the next decade.

While the IEA has sounded warnings that Middle East crude production will need to rise in the 2020s to meet predicted demand, Chief Economist Fatih Birol said there remain "myopic" views about the need for investment at a time when the fall in oil prices means energy companies are slashing new drilling.

Inventories

Ghana’s current stock of Diesel and Petrol to last 2.7 and 4.3 weeks respectively (as at February 23, 2015). Diesel’s stock of 2.7 weeks compare unfavorably to last week’s stock to last of 3.2 weeks, while Petrol’s stock of 4.3 weeks compare favorably to last week’s stock to last of 2.3 weeks.

According to the import schedule, diesel of about 23.7 million litres is expected for delivery, while Petrol of about 13.4 million litres is expected for delivery to add to existing stockpiles for the market. LPG of about 5.0 million kilogrammes is also expected for delivery by close of the week (February 28, 2015).

The CDU and RFCC unit was shut down on 3/2/15 and 20/1/15 respectively. The CDU was shut down due to lack of crude and the RFCC suspended operations due to planned mini-maintenance.

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for week ended February 13, 2015 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 7.7 million barrels to 425.7 million barrels.

Gasoline stockpiles increased by 0.5 million barrels to 245.9 million barrels. Inventories of distillate fuel, a category including heating oil and diesel, decreased by 3.8 million barrels to 208.0 million barrels over the same period. Total commercial petroleum inventories decreased by 0.8 million barrels last week.

Demand and Supply

The EIA in its Weekly Petroleum Status report for week ended February 13, 2015 reported that, U.S. crude oil imports averaged 7.1 million barrels per day last week, down by 181,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged 7.3 million barrels per day, 3.6% below the same four-week period last year.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 635,000 barrels per day. Distillate fuel imports averaged 216,000 barrels per day last week.

Japan's customs-cleared crude oil imports fell 7.2 percent in January from the same month a year earlier, the Ministry of Finance said on Thursday.

Japan, the world's fourth-biggest crude buyer, imported 3.55 million barrels per day (17.52 million kilolitres) of crude oil last month, the preliminary data showed. Japan's imports of liquefied natural gas totalled 8.43 million tonnes last month, up 3.1 percent from a year earlier. Imports of thermal coal for power generation increased by 10.2 percent in January to 11.19 million tonnes, the data showed.

Production from Saudi Arabia is rising, and demand has pushed it up to about 10 million barrels per day (bpd), according to energy consultancy PIRA.

The estimate suggested the country is hewing tightly to the strategy of protecting market share rather than cutting production to try to inflate prices. Saudi production averaged about 9.7 million bpd since last June, according to the consultancy.

References
  • www.bloomberg.com
  • www.reuters.com
  • www.bbc.co.uk
Tuesday(February,17 2015)

HEDGING OF PETROLEUM PRODUCTS TO BEGIN IN MARCH, 2015

Overview

In the last couple of months, there has been on-going discussions on prices of crude oil on the international market and the impact it has on prices of petroleum product in Ghana. More specifically, recent lowering prices of crude oil and petroleum products on the world market has yielded calls from sections of the public for lower prices of fuel for domestic consumers.

The response from the National Petroleum Authority (NPA) to these calls has been consistent with the rationale that the part of the windfall from low price of crude oil should be applied to settling debts of GHC412milion owed local Bulk Oil Distribution Companies (BDCs) incurred as a result of accrued under-recoveries as at July 2104.

Background of under-recoveries/debt owed BDCs

The mention of under-recoveries or debt owed BDCs leads me naturally to explain the background of this debt of GHC412 million owed the BDCs.

In the periods between 2013 and July 2014, Government through its social programme had intervened in the full-pass-through policy of National Petroleum Authority in order to keep prices from going up.

But for this social intervention, fuel prices would have been increased more often between 2013 and 2014 than it had been. This intervention of keeping prices at the pump lower than what they ought to be (under-recovery) led to the accumulation of under-recovery of GHC412million.

This amount was owed to BDCs who imported refined petroleum products into the country at various period between 2013 and July 2014.

This debt (under-recovery) had to be paid in order to guarantee regular supply of fuel to keep the economy moving. Which is why the NPA maintained that the windfall from lowering prices on the world market is applied to settling the indebtedness.

Cumulative 12% Reduction in Fuel Prices

It would be recalled that the whiles NPA continued to use the windfall from crude oil prices to pay off a debt of GHC412MILLION under-recoveries owed BDCs, there was the need to give some of the windfall to the consumer.

The NPA subsequently announced a 2% reduction in the price of fuel to be followed by another reduction of 10% bringing the total reduction to 12% with a commitment to paying the debt owed the BDCs.

Based on the reduced price, NPA has projected to complete payment of the debt of GHC412 million owed the BDCs by end of February 2015., I am indeed pleased to announce that the mission is accomplished.
 
Price of Crude Oil on the world market begun to fall

Crude Oil price on the world market fell from USD106 per barrel in July 2014 to about USD46 per barrel in December 2014 representing a decrease of 59% yielding a windfall of GHC415million.

As I mention earlier, from this amount, GHC412million has been used to settle the debt (under-recoveries) owed the BDCs.

Since January 28th 2015, crude oil price has begun to rebound.  From USD46 to near USD60 per barrel representing an increase of 12%.  The NPA projects that trend will be sustained for some months.

Additionally, the GHC/USD exchange rate monitored from the Central Bank had also shown depreciation of about 3% since February 1, 2015.

The Way forward

As has been observed by the NPA, crude oil prices have begun a steady appreciation. The impact of the volatility in the prices of products and the forex rate poses a significant challenge to keeping prices low.

There is therefore the need for alternatives to the policy of full-pass-through. We are considering the proposal of implementing a hedge policy by March 1st 2015.

We estimate a strike price of USD700 and USD750 for diesel and petrol respectively for an estimated annual consumption of 2.8million Metric tons of products will translate into a hedge premium cost of 8.6miilion.
Wednesday(February,11 2015)

REJOINDER - DANGER: WRONG FUEL FOR YOUR VEHICLE

The attention of the National Petroleum Authority (NPA) has been drawn to an article entitled, “Danger: wrong fuel for your vehicle,” which was published on the front page of the Tuesday, February 10, 2015 edition of the Finder newspaper.

The story contained some factual inaccuracies which we seek to clarify.

In the said publication, which was discussed on several media platforms, claimed amongst other things  that, many Ghanaians were spending so much money on the repair of their vehicles because such cars were not designed to use the kind of fuel sold in the country.

The story went on to say that Ghana lacks standards on the types of vehicles that can be imported into the country in consonance with the type of fuel sold in Ghana.

Clearly, the story has nothing to do with the quality of fuel offered for sale in the country as the headline sought to suggest.

But the writer then switched to say that the Ghana Automobile Distributors Association (GADA) was, therefore, calling on government to, as a matter of urgency, promulgate a legislation that clearly stipulates fuel standards for vehicles in Ghana.

The NPA wishes to state in unequivocal terms that Ghana has specifications for all petroleum products sold in the country.

We are aware that there are different types of vehicles that come into the country and most of these new vehicles which are manufactured in Europe and America use petrol with minimum Research Octane Number (RON) of 95.

Currently in Ghana, the minimum RON for motor vehicles is RON 91 per Ghana Standard Authority specifications due to the fact that our refinery produces that minimum grade.

On the Ghanaian market currently, there are fuels ranging from minimum RON of 91 to 95 which implies that all vehicle types are able to fit into this boundary. Even most of the newest and advanced cars that use petrol with RON above 95 are able to use the fuel on our market because such fuels have octane boosters added to boost the octane levels up to about RON 98.

If the The Finder newspaper had first cross checked these claims with the National Petroleum Authority prior to publication as the ethics and practice of journalism enjoin, we would have corrected these misleading information.

We hereby deny these allegations in the said story and reemphasize that fuel sold on the Ghanaian market is of the finest quality.

As a Regulator of the downstream petroleum industry, we are aware of the importance of providing quality petroleum products to the market which is why we introduced innovative strategies such as the Petroleum Product Marking Scheme (PPMS) and quality monitoring programmes aimed ensuring that the quality standard of fuel sold at final dispensing outlets are maintained to the right specifications and quality. The PPMS programme by the NPA uses cutting edge technology and ultra-modern laboratory, the only one of its kind in West Africa. The programme also undertakes round the clock inspections of fuel stations across the country to guarantee the integrity of fuel sold on the market.

In this regard, the NPA wishes to assure the general public that fuels (petrol and diesel) sold in the country are safe and fit for all types of vehicles imported into the country and we will continue to ensure that only quality fuels are sold on the market.
 
ISSUED BY THE NATIONAL PETROLEUM AUTHORITY
Tuesday(February,10 2015)

DANGER: WRONG FUEL FOR YOUR VEHICLE

It has emerged that several Ghanaians, including government, spend so much money on the repair of their vehicles because such cars are not designed to use the kind of fuel sold in Ghana.

This is happening because Ghana lacks standards on the type of vehicles that can be imported into the country in consonance with the type of fuel sold in the country.

Some of the affected vehicles in Ghana include Ford F 350 and Toyota Tundra, which is mostly used by the Ghana Police Service.

The Ghana Automobile Distributors Association (GADA) is, therefore, calling on government to, as a matter of urgency, promulgate a legislation that clearly stipulates fuel standards for vehicles in Ghana.

This, the association said, is critical to saving unsuspecting Ghanaians and government from buying vehicles and running them on the wrong fuel and spending so much money on frequent repairs.

Speaking to The Finder, Mr Kojo Annobil, Vice-President of GADA, said such a legislation would save the country millions of cedis in repair cost while prolonging the lifespan of vehicles.

He explained that the Research Octane Number (RON) of petrol sold in Ghana ranges between 91 and 94 while the only type of diesel sold in Ghana has higher sulphur content.

According to him, the proposed legislation should restrict the importation of vehicles, as only cars designed to use the above-mentioned fuel should be imported into the country.

Mr Annobil stated that car manufacturers only give cars designed to use the fuel in Ghana to accredited vehicle distributors, thus preventing them from importing vehicles that use other fuel not found in Ghana.

However, he said non-accredited dealers import all kinds of vehicles which use higher grade of fuel not found in Ghana.

He noted that spare parts of such vehicles are also not sold in Ghana and, therefore, owners have to order for ineffective parts from abroad.

Mr Annobil said the legislation would ensure that vehicle standards conform to the fuel available in Ghana.

The GADA Vice-President stated that the performance of a vehicle and its lifespan are directly linked to the performance of the fuel it uses.
Tuesday(February,03 2015)

OIL MARKET NEWS (WEEK 4): WEEK ENDED JANUARY 30, 2015

  Major Highlights
  • Brent crude oil trades in a range of $46-$48 per barrel
  • The weekly average GHS/USD exchange rate depreciates when compared to the previous week
  • Libya returns fuel tanker to rival government
  • Ghana’s current stock of diesel increases; petrol decreases when compared to the previous week
  • Total U.S commercial petroleum inventories increased by 2.0 million barrels last week
  • China’s oil demand to grow 3 percent in 2015
  • Ghana’s consumption of petroleum products except MGO Foreign declines in Nov 2014 (MoM).
Average Dated Brent price for the week (published by Platts) increased marginally by $0.28 to $47.14 per barrel from the previous week's average of $46.87 a barrel, indicating 0.59% rise. Brent crude oil price increased marginally for the second consecutive week as a weak dollar propped up commodities, which are priced in US dollar.

The dollar stepped back from an 11-year peak against a basket of currencies after soft spending data and some disappointing earnings cast doubts about the underlying optimism on the U.S. economic outlook.

"The key driver for oil prices in the last few days has been currency fluctuations ... we had seen some weakness in the U.S. dollar which helped support prices overnight," Ric Spooner, chief analyst at CMC Markets in Sydney, said.

Also supporting prices were comments by OPEC's secretary-general that oil prices at current levels may have reached a floor and could move higher very soon, his first public comment that oil's second-biggest decline on record may have run its course.

Abdulla al-Badri also warned of a risk of a future price spike to $200 a barrel if investment in new supply capacity is too low.

Free on board (FOB) prices of petrol decreased by $3.90 to $472.05/MT from the previous week's average of $475.95, indicating 0.82% decline; diesel increased by $3.60 to $467.20/MT from the previous week’s average of $463.60, indicating 0.78% rise; and LPG increased by $17.80 to $324.40/MT from the previous week’s average of $306.60, indicating 5.81% rise, during the period under review.

The average GHS/US Dollar exchange rate depreciated when compared to the previous week. The depreciation of the Ghana Cedi against the USD, increased marginally the contribution of the exchange rate in the Price Build-Up.

The GHS/US Dollar exchange rate for the period 26th January 2015 to 30th January 2015 was 3.2368 compared to 3.2271 during the previous week (0.30% depreciation).

The GHS equivalent of FOB prices for petrol decreased by 0.52%, while diesel and LPG increased by 1.08% and 6.12% respectively, during the same period under review.

Geopolitics

Libya's recognized government has released a tanker forced to dock at a port under its control after originally banning it from delivering fuel to its rival administration, a port official said. War planes forced the tanker Anwaar Afriqya to sail to Tobruk after it had originally approached the port of Misrata, the air force commander for the recognized Prime Minister Abdullah al-Thinni said.

This could be seen as a sign by Libya’s recognized government to extend a hand of friendship to its rival government in an attempt at brokering peace between the two feuding factions.

Inventories

Ghana’s stock of Diesel and Petrol to last 4.0 and 3.0 weeks respectively (as at February 2, 2015). Diesel’s stock of 4.0 weeks compare favorably to last week’s stock to last of 3.4 weeks, while Petrol’s stock of 3.0 weeks compare unfavorably to last week’s stock to last of 3.6 weeks.

According to the import schedule, diesel of about 70.4 million litres was expected for delivery, while Petrol of about 49.7 million litres was expected for delivery to add to existing stockpiles for the market.

LPG of about 5.0 million kilogrammes was also expected for delivery by close of the week (February 7, 2015). The CDU unit at TOR resumed production on 29/12/2014 and is currently producing at a rate of 3,718MTPSD (70%). The RFCC unit was shutdown due to planned mini-maintenance on 20/01/2015.

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for January 23, 2015 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 8.9 million barrels to 406.8 million barrels.

Last week's surge in U.S. crude oil stocks left them at the highest level for this time of year in at least the last 80 years, according to the EIA. Gasoline stockpiles decreased by 2.6 million barrels to 241.1 million barrels.

Inventories of distillate fuel, a category including heating oil and diesel, decreased by 3.9 million barrels to 213.3 million barrels over the same period. Total commercial petroleum inventories increased by 2.0 million barrels last week.

Demand and Supply

China's implied oil demand will grow 3 percent this year (2015) versus last year, the country's top energy group forecast, little changed from the pace of growth in 2014 as calculated by Reuters. State-owned China National Petroleum Corporation (CNPC) saw the nation's oil demand rising to 10.68 million barrels per day (bpd) in 2015, some 310,000 bpd higher than last year.

References
  •  www.bloomberg.com
  • www.reuters.com
  • www.bbc.co.uk
Wednesday(January,28 2015)

OIL MARKET NEWS (WEEK 3): WEEK ENDED JANUARY 23, 2015

Major Highlights
  • Brent crude oil trades in a narrow range of $46-$47 per barrel
  • The weekly average GHS/USD exchange rate depreciates when compared to the previous week
  • New fighting breaks out near biggest Libyan oil port
  • Ghana’s current stock of diesel increases; petrol unchanged when compared to the previous week
  • U.S crude stockpiles surge with largest build in 14 years
  • Total U.S commercial petroleum inventories increased by 2.4 million barrels last week.

Brent crude oil trades in a narrow range of $46-$47 per barrel

Average Dated Brent price for the week (published by Platts) increased marginally by $0.34 to $46.87 per barrel from the previous week's average of $46.53 a barrel, indicating 0.73% rise.

Oil prices jumped as news of the death of Saudi Arabia's King Abdullah added to uncertainty in energy markets already facing some of the biggest shifts in decades.

"The fear of the unknown is going to be supportive to crude oil prices," said John Kilduff, partner, Again Capital LLC in New York. "King Abdullah was the architect of the current strategy to keep production high and force out smaller players instead of cutting," he added.

Gains were however capped, as Saudi Arabia's new King Salman moved to assuage fears of an unstable transition and any policy change in the world's largest oil exporter.

"Oil markets will take comfort from the speed and stability of the succession process, and the announced pledge for continuity of policy," said Majid Jafar, chief executive of Crescent Petroleum, a UAE-headquartered oil and gas producer focussed on the Middle East.

Free on board (FOB) prices of petrol increased by $13.00 to $475.95/MT from the previous week's average of $462.95, indicating 2.81% rise; diesel increased by $6.85 to $463.60/MT from the previous week’s average of $456.75, indicating 1.50% rise; and LPG increased by $25.10 to $306.60/MT from the previous week’s average of $281.50, indicating 8.92% rise, during the period under review.

The weekly average GHS/USD exchange rate depreciates when compared to the previous week

The average GHS/US Dollar exchange rate depreciated when compared to the previous week. The depreciation of the Ghana Cedi against the USD, increased marginally the contribution of the exchange rate in the Price Build-Up.

The GHS/US Dollar exchange rate for the period 19th January 2015 to 23rd January 2015 was 3.2271 compared to 3.2190 during the previous week (0.25% depreciation).

The GHS equivalent of FOB prices for petrol, diesel and LPG increased by 3.07%, 1.76% and 9.19% respectively, during the same period under review.

Geopolitics

New fighting breaks out near biggest Libyan oil port

Libyan armed factions accused each other of launching new attacks near the country's largest oil port, Es Sider. Two opposing governments - the internationally recognized authorities in the east and rivals who have seized the capital, Tripoli - are fighting for control of the country.

Troops loyal to the Tripoli government opened an offensive last month to try to take Es Sider and Ras Lanuf oil ports, which have had to shut down operations. Both sides declared partial ceasefires in the past few days to give a U.N.-sponsored dialogue a chance after a month of clashes.

Inventories

Ghana’s current stock of diesel increases; petrol unchanged when compared to the previous week

Ghana’s stock of Diesel and Petrol to last 3.4 and 3.6 weeks respectively (as at January 26, 2015). Diesel’s stock of 3.4 weeks compare favorably to last week’s stock to last of 3.3 weeks, while Petrol’s stock of 3.6 weeks remained unchanged when compared to last week’s stock to last of 3.6 weeks.

According to the import schedule, diesel of about 102.5 million litres was expected for delivery, while Petrol of about 40.3 million litres was expected for delivery to add to existing stockpiles for the market. LPG of about 2.5 million kilogrammes was also expected for delivery by close of the week (January 31, 2015). The CDU unit at TOR resumed production on 29/12/2014 and is currently producing at a rate of 3,936MTPSD (74%). The RFCC unit was shutdown due to planned mini-maintenance on 20/01/2015.

Total U.S commercial petroleum inventories increased by 2.4 million barrels last week

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for January 16, 2015 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 10.1 million barrels to 397.9 million barrels. U.S. crude oil inventories had their largest weekly build since 2001, surpassing expectations as refineries reduced production.

Last week's surge in U.S. crude oil stocks left them at the highest level for this time of year in at least the last 80 years, according to the EIA. Gasoline stockpiles increased by 0.6 million barrels to 243.7 million barrels. Inventories of distillate fuel, a category including heating oil and diesel, decreased by 3.3 million barrels to 217.2 million barrels over the same period. Total commercial petroleum inventories increased by 2.4 million barrels last week.

Demand and Supply

Total U.S commercial petroleum inventories increased by 2.4 million barrels last week

The EIA in its Weekly Petroleum Status report for January 16, 2015 reported that, U.S. crude oil imports averaged over 7.2 million barrels per day last week, down by 274,000 barrels per day from the previous week.

Over the last four weeks, crude oil imports averaged about 7.2 million barrels per day, 4.2% below the same four-week period last year.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 683,000 barrels per day. Distillate fuel imports averaged 268,000 barrels per day last week.

Total products supplied over the last four-week period averaged 19.7 million barrels per day, up by 4.9% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged over 9.0 million barrels per day, up by 8.7% from the same period last year.

Distillate fuel product supplied averaged 3.9 million barrels per day over the last four weeks, up by 12.5% from the same period last year. Jet fuel product supplied is up 7.6% compared to the same four-week period last year.

References
  • www.bloomberg.com
  • www.reuters.com
  • www.bbc.co.uk
Friday(January,02 2015)

OIL MARKET NEWS (WEEK 53): WEEK ENDED JANUARY 2, 2015

  Major Highlights
  • Brent crude oil trades below $60 per barrel on supply glut
  • The weekly average GHS/USD exchange rate depreciates when compared to the previous week
  • Libya makes progress after fire at oil port destroys up to 1.8 million barrels of crude
  • Ghana’s stock of diesel decreases while petrol increases when compared to the previous week
  • Total U.S commercial petroleum inventories increased by 2.8 million barrels last week.
  • Russia oil output hits post-Soviet high.
  • Iraq’s December oil exports hit 2.940 million bpd, highest since 1980

Brent crude oil trades below $60 per barrel on supply glut

Average Dated Brent price for the week (published by Platts) decreased by $2.83 to $55.87 per barrel from the previous week's average of $58.70 a barrel, indicating 4.82% decline

Brent crude oil price dropped as worries about a surplus of global supplies and lacklustre demand dragged on oil markets. Global supply glut outweighed concerns of lost supply from Libya where battling militias have closed ports.

Russia's oil output hit a post-Soviet high last year, averaging 10.58 million barrels per day (bpd), up 0.7 percent thanks to small non-state producers, Energy Ministry data showed, adding to an already oversupplied oil market. "Nothing has changed on the supply side.

Unless there are some supply cuts, oil markets can't be strong at the moment," said Ken Hasegawa, commodity sales manager at Tokyo's Newedge Japan.

Free on board (FOB) prices of petrol decreased by $18.71 to $518.13/MT from the previous week's average of $536.83, indicating 3.48% decline; diesel decreased by $26.56 to $520.69/MT from the previous week’s average of $547.25, indicating 4.85% decline; and LPG decreased by $29.83 to $358.00/MT from the previous week’s average of $387.83, indicating 7.69% decline, during the period under review.

The weekly average GHS/USD exchange rate depreciates when compared to the previous week

The average GHS/US Dollar exchange rate depreciated when compared to the previous week. The depreciation of the Ghana Cedi against the USD, increased marginally the contribution of the exchange rate in the Price Build-Up.

The GHS/US Dollar exchange rate for the period 29th December 2014 to 2nd January 2015 was 3.2017 compared to 3.2000 during the previous week (0.05% depreciation). The GHS equivalent of FOB prices for petrol, diesel and LPG decreased by 3.43%, 4.80% and 7.64% respectively, during the same period under review.

Geopolitics

Libya makes progress after fire at oil port destroys up to 1.8 million barrels of crude

Libya has made more progress in extinguishing a fire at oil storage tanks at the country's biggest oil port, Es Sider that has been raging for one week, a member of a firefighting crew said.

The fire destroyed up to 1.8 million barrels of crude and damaged seven storage tanks, causing total damage of $213 million, a top oil official said.

Es Sider and its adjacent Ras Lanuf terminal have been closed since a group allied to a rival government in Tripoli moved three weeks ago to try and take them, part of a struggle between former rebels who helped topple Muammar Gaddafi in 2011 but are now fighting for power and a share of oil reserves.

Inventories

Ghana’s stock of diesel decreases while petrol increases when compared to the previous week

Ghana’s stock of Diesel and Petrol to last 3.8 and 3.5 weeks respectively (as at December 29, 2014). Diesel’s stock of 3.8 weeks compare unfavorably to last week’s stock to last of 4.8, while Petrol’s stock of 3.5 weeks compare favorably to last week’s stock of 1.9 weeks.

According to the import schedule, diesel of about 65.1 million litres was expected for delivery, while Petrol of about 119.5 million litres was expected for delivery to add to existing stockpiles for the market. LPG of about 7.0 million kilogrammes was also expected for delivery by close of the week (January 3, 2015). The CDU and RFCC remain shut down due to lack of feed and planned mini maintenance respectively.

Total U.S commercial petroleum inventories increased by 2.8 million barrels last week

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for December 26, 2014 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.8 million barrels to 385.5 million barrels.

Gasoline stockpiles increased by 3.0 million barrels to 231.8 million barrels. Inventories of distillate fuel, a category including heating oil and diesel, increased by 1.9 million barrels to 206.4 million barrels over the same period. Total commercial petroleum inventories increased by 2.8 million barrels last week.

Demand and Supply

Russia oil output hits post-Soviet high

Russia's 2014 oil output hit a post-Soviet record high average of 10.58 million barrels per day (bpd), rising by 0.7 percent helped by small non-state producers, Energy Ministry data showed. Oil and gas condensate production in December hit 10.67 million bpd, also a record high since the collapse of the Soviet Union.

The data showed Russia's so-called small producers, mostly privately held, increased their output by 11 percent to just over 1 million barrels per day.

Iraq’s December oil exports hit 2.940 million bpd, highest since 1980

Elsewhere, Iraq's oil exports hit a record high average of 2.940 million barrels per day (bpd) in December, their highest level since1980, an oil ministry spokesman said. Oil officials said exports from the country's southern terminals hit a record high 2.760 million bpd.

OPEC's oil supply fell by 270,000 barrels per day (bpd) in December to a six-month low as fighting cut Libyan output, offsetting record Iraqi southern exports and stable Saudi Arabian production, a Reuters survey found.

The survey indicates Libyan turmoil is effectively lowering output by the Organization of the Petroleum Exporting Countries, even after oil ministers decided at a meeting in Vienna last month against a formal reduction to defend market share.

References
  • www.bloomberg.com
  • www.reuters.com
  • www.bbc.co.uk
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