Energy think tank the Africa Centre for Energy Policy (ACEP) has expressed fears that prices of fuel may go up after Saudi Arabia and other OPEC+ oil producers on Sunday announced further oil output cuts of around 1.16 million barrels per day.
The Executive Director of ACEP, Benjamin Boakye says this may have an impact on the domestic market.
He however said this is a test case for the government’s Gold-for-Oil policy which according to the Vice President Dr Mahamaud Bawumai led to a decline in fuel prices.
The action of the Saudi Arabia and other OPEC+ oil producers comes a day before a virtual meeting of an OPEC+ ministerial panel, which includes Saudi Arabia and Russia, and which had been expected to stick to 2 million bpd of cuts already in place until the end of 2023.
Oil prices last month fell towards $70 a barrel, the lowest in 15 months, on concern that a global banking crisis would hit demand. Still, further action by OPEC+ to support the market was not expected after sources downplayed this prospect and crude recovered towards $80.
Speaking on the News 360 on TV3 with Martin Asiedu Darteh on Monday April 3, Mr Benjamin Boakye said “From where we sit it is our expectation that the prices will go up all things being equal. If the market is working as it has been then prices should go up. We saw prices decline close to 7 dollars per barrel.
“Today, it is trading at around 82, even earlier in the day it was trading at 85 dollars per barrel.
“When the prices kept declining and to almost 70 dollars per barrel government kept saying that it wasn’t the international market but rather it was the effect of gold-for-oil.
“This is the test case for us to know whether indeed the gold-for-oil can push the prices down even when the international market is dictating the prices. if we are to hold that position as the truth that I was rather gold for oil then we should expect that prices would either stay the same way or it will decline.”