Godwin Edudzi Tamakloe, the Chief Executive Officer of the National Petroleum Authority (NPA), has emphasised the significance of exchange rate stability in shielding Ghanaians from the full effects of rising fuel costs worldwide.
Speaking on TV3’s “Big Issues” program, Mr. Tamakloe pointed out that while supply chain interruptions and geopolitical concerns have caused a jump in global crude oil prices, the impact on domestic fuel costs has been mitigated by efficient cedi management.
He praised President John Dramani Mahama’s administration’s economic management, saying that the local currency’s relative stability has been crucial in protecting consumers.
He claims that because Ghana imports around 60% of its petroleum products, domestic fuel prices are extremely vulnerable to changes in the currency rate.
He clarified that pump prices would have skyrocketed in the event of a lower cedi.
“If the Ghana cedi were trading at 15 to one dollar, petroleum products would have been around GHS23 per litre,” he stated, noting that the stability of the current exchange rate has prevented such steep hikes.
Brent crude oil prices have risen beyond $100 per barrel, up from roughly $66 before the recent Middle East conflicts, according to Mr. Tamakloe, who also emphasised growing global cost constraints.
He continued by saying that rising freight and insurance expenses, especially for diesel, have increased the cost of imports.
He said that despite these changes, local fuel costs have been stabilised via exchange rate management, averting a potentially more dire economic impact.
He warned that comparable circumstances now would have further exacerbated fuel price hikes, recalling earlier times when the cedi fell to almost 17 to the dollar.
Maintaining currency stability is still a crucial policy instrument for protecting the downstream petroleum industry and reducing the impact of global price volatility on consumers, Mr. Tamakloe emphasised.
He emphasised that while global pressures continue, smart measures can help prevent dramatic price spikes and asked the people to recognise the role that strong economic management plays in moderating external shocks.
Source: newsthemegh.com