Fuel prices could stay volatile as global safety net shrinks – SEMPA warns

Ghanaian motorists and businesses are being warned of ongoing fuel price uncertainty by SEMPA Africa, an energy sector civil society group. The warning stems from a significant reduction in the United States Strategic Petroleum Reserve, which has reached its lowest level in over 40 years. Although Ghana does not directly draw fuel from the US reserve, its depletion is expected to increase fuel prices in the country.

SEMPA Africa states that the reserve serves as part of a wider global buffer, and its decline raises the risk premium on international crude and refined product prices, which quickly impacts local pump prices. With about seven out of every 10 litres of fuel sold in Ghana imported, fuel price volatility is quickly felt by consumers.

The organization attributes the reduction in the US reserve to a March release of 172 million barrels after Iran restricted tanker traffic through the Strait of Hormuz. SEMPA Africa urges consumers, transport operators, and businesses to prepare for potential price increases and calls on the government to implement measures such as maintaining cedi stability, expanding domestic refining capacity, and strengthening Ghana's own strategic fuel reserves.