Petrol prices set to drop while diesel costs climb in mid-August fuel adjustment

Ghana's petroleum market faces a mixed pricing landscape in the second half of August as global crude oil pressures and currency movements create divergent outcomes for different fuel types. The Chamber of Oil Marketing Companies (COMAC) has projected that petrol prices will decline by approximately 2.90%, while liquefied petroleum gas (LPG) will fall by 0.93%. Diesel, however, will move in the opposite direction with an expected increase of about 1.39%, reflecting the complex forces reshaping fuel costs at the pump.

According to the National Petroleum Authority's price floors for this period, petrol will drop by GH¢0.61 per litre to GH¢13.92, offering some relief to motorists already struggling with transport costs. LPG users will see a modest reduction of GH¢0.08 per kilogram to GH¢10.98. Conversely, diesel prices will rise by GH¢0.22 per litre to GH¢15.19, continuing pressure on hauliers, commercial transporters, and businesses reliant on diesel-powered equipment.

Global forces driving local fuel costs

The mixed pricing reflects turbulent international energy markets. International crude oil prices surged by 2.02% to $US90.41 per barrel in mid-August, driven primarily by geopolitical tensions—particularly disputes between the United States and Iran, alongside threats to global supply chains around the Strait of Hormuz. Refined petroleum products on the international market showed equally volatile movements, with diesel prices climbing 2.86% while petrol and LPG declined by 5.46% and 2.54% respectively.

Diesel has faced particular pressure from multiple geopolitical flashpoints. Recent attacks on Russian refining facilities by Ukrainian forces, combined with Houthi strikes on Saudi refining infrastructure, have disrupted global refining capacity and tightened diesel supply. These supply concerns outweigh broader price declines in other petroleum products, keeping diesel prices elevated despite potential currency relief.

Why it matters for Ghana

The divergent fuel price movements will have unequal impacts across Ghana's economy. While petrol and LPG consumers will experience modest cost relief, the diesel price increase directly threatens transportation costs, agricultural operations, and industrial production. Ghana's haulage and logistics sectors, already burdened by fuel costs, will face renewed pressure on margins, likely translating to higher costs for goods and services across the economy.

The government's intervention to cushion diesel consumers through a GH¢2 regulatory margin reduction in early August has been partially offset by rising international prices. COMAC noted that government-industry intervention mechanisms are expected to continue, suggesting policymakers recognise the broader economic impact of diesel price shocks on transportation and commerce.

Positively, the Ghanaian cedi has recovered strength since late July, appreciating from GH¢11.80 to GH¢10.98 to the US dollar. This currency appreciation helps reduce the local naira cost of imported petroleum products, potentially offering relief in subsequent pricing windows if the trend persists. However, continued global crude price volatility means future windows remain uncertain.

It is important to note that the NPA price floors do not represent actual pump prices—Oil Marketing Companies apply their own margins and operational charges, meaning final prices may differ from these reference points.