CBOD moves to help reduce fuel prices

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The Chamber of Bulk Oil Distribution Companies (CBOD) has advised Bulk Oil Distribution Companies (BDCs) to revise their trade credit tenor from the current forward foreign exchange (FX) rate from the average 60-day (FuFeX60) to 30-day forward rate (FuFeX60).

It stated that the adoption of a FuFeX30 (30-day forward rate) instead of FuFeX60 (60-day forward rate) can reduce pump prices by about 2%.

This, the chamber said, would help reduce consumer prices at the pump.

These are contained in the CBOD Petroleum Price Outlook, which is the price indicator for the first selling window of August 1-15, 2019.


The forward FX rate (FuFeX) used is the average of the quoted indicative forward forex rate from major oil financing banks adjusted by the covered-interest parity pricing model.

The FuFex60 is computed as the average 60-day forward forex rate of selected major oil financing banks.

The Fufex60 to be applied for the first selling window of August 2019 is GH₵5.60 for $1.

The adoption of a FuFeX30 (30-day forward rate), instead of FuFeX60, can reduce pump prices by about 2%.

The Ex-refinery Price Indicator (Xpi)

The Ex-ref price indicator (Xpi) is computed using the referenced international market prices as observed to be usually adopted by BDCs, factoring the CBOD economic breakeven benchmark premium for a given window and converted from USD/mt to Ghs/ltr using the FuFeX.

Price indicator for August 1-15, 2019

The price indicator for the first selling window of August 1-15, 2019 put the price of a litre of petrol at GH₵2.998 and GH₵3.146 for diesel.

Price tolerance level of +2% or -0.25%

The price tolerance level for both commodities stands at +2% or -0.25%.

Benchmark Breakeven Premium

CBOD’s Benchmark Breakeven Premium per metric tonne is $60 for petrol and $80 for diesel.

FuFex60 at GH₵5.6

It pegged the FuFex60 at GH₵5.6 to the dollar.

Price indicator for July 12-26 window

The price indicator for July 12-26 window shows that the average world market price per metric tonne was $648.98 for petrol and $548.73 for diesel.

Volume Conversion Factor

The price indicator shows that the Volume Conversion Factor in metric tonnes was 1,324.50 for petrol and 1,183.43 for diesel.

Refined Products Review and Outlook

The international market prices of gasoline and gasoil averaged $648.98/mt and $584.73/mt respectively in the first pricing window of July (July 12 – 26, 2019), $5.70/mt lower than the previous window in the case of gasoline and $0.89/mt higher than the previous window for gasoil.

These prices (July 12 – 26) were 29% and 7% higher than average prices observed in the beginning pricing window of the year.

Average international market prices have been sporadic during the year, starting the first window of January at $504/mt for gasoline and $545.63/mt for gasoil.

Prices for gasoline and gasoil peaked in the first selling window of June at $749.68/mt and $639.88/mt respectively.

This was 49% and 17% higher than prices observed in the first window of January 2019.

International market prices are expected to drop between 1% and 2% for both gasoline and gasoil in the second pricing window of July (July 27 – August 11, 2019).

This is attributable to the ongoing trade war between USA and China, which has slowed the growth in China’s demand.


Source: The Finder

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Kennedy Mornah is an Award Winning Ghanaian Journalist with over two decades of experience in the Ghanaian Media landscape spanning the electronic, print and digital media. He is a Media Consultant, a Corporate MC, Radio and TV Host, Founder and Publisher of the Maritime and Transport Digest Newspaper, Businessman, a Go getter and an optimist. He has worked for renowned media organizations including Diamond Fm in Tamale, Luv Fm in Kumasi, Oman Fm in Accra and Starr Fm in Accra In 2017 he received the Reporter of the Year Award at the Ghana Shippers Awards in Accra, Ghana.

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