Energy Expert Warns Middle East Tensions Could Push Global Fuel Prices Higher
Energy expert Sampson Addae has warned that the ongoing tensions in the Middle East are likely to drive up global fuel prices.
In a media engagement, he explained that targeted missile and drone attacks on energy infrastructure in Saudi Arabia and Qatar, coupled with geopolitical tensions involving Iran, a major oil-producing country, have already caused oil prices to rise on the world market.
He added that if the crisis persists, further increases in fuel prices are expected, with potential implications for domestic fuel costs and global energy supply.
“Yes, I think the war is going to have an impact not only on Ghana’s energy sector but the whole world. Yesterday, Iran sent some missiles to Saudi Arabia, targeting their biggest refinery called the Ras Tanura Refinery, trying to bomb the refinery. But the Saudi Arabians were able to resolve the impact of the drones they sent. Even with that, there were some small damages and parts of the refinery got burnt, but they were able to put it off. Because of that they shut down the refinery.That was not the end. Iran also sent another missile or drone attack to Qatar to their energy centre, but they were also able to intercept the drones before they could hit the facility. However, they also had to shut down the centre. When those speculations went onto the stock market, fuel prices moved from about $72 per barrel to around $82 per barrel within an hour. This shows how the impact of the war is going to affect prices on the international markets.”
Sampson Addae further explained that the impact of the ongoing Middle East tensions on Ghana’s fuel prices is likely to be reflected in the next pricing window on March 15, warning that petrol and diesel prices could increase by about 3 to 6 percent if global crude oil prices remain high.
According to him, although the first pricing window for March recorded only a marginal increase, developments on the international oil market will be closely monitored over the next two weeks to determine the extent of adjustments. He noted, however, that the recent appreciation of the Ghanaian Cedi against the United States Dollar could help cushion the impact of any increases on consumers.
“Yesterday was the first pricing we did for the month of March and that two-week stretch came before the war escalated. Even though we had a fuel increment, it was marginal. Petrol moved from 10.24 cedis per litre to 10.46 cedis per litre and diesel also moved to about 11.67 cedis per litre.But the impact of the war will be seen in the second pricing window which will be two weeks away from now, around the 15th of March. From now until then, we will observe the daily price movements on the stock market, whether it will remain around $82 per barrel, drop to around $80, or trade between $70 and $75.
If that trend continues, we are likely to see fuel prices increase by about 3 percent to 6 percent. However, the good thing is that the Ghanaian Cedi has appreciated and now has some strength against the United States Dollar.So once prices on the international market go up, the impact may not be as severe as what we experienced in 2022 during the Russia–Ukraine War, when petrol and diesel sold at about 22 to 23 cedis per litre. This time it may not get to that stage. The maximum could be around 14 or 15 cedis per litre because the cedi has strengthened.”he explained
Mr. Addae therefore urged authorities and consumers to closely monitor developments on the global oil market in the coming weeks, noting that the direction of the conflict in the Middle East will play a key role in determining fuel price adjustments in Ghana.
About The Author
