Price of petroleum products to be reduced by over 2%
Recent figures from some bulk importers of petroleum products indicate that the price of petroleum products is to be reduced by over 2 percent from this weekend.
JoyBusiness’ calculations shows that the price of petrol is likely to go down by 2.67%, translating to about 13.5 pesewas per litre.
Diesel should be reduced by 1.95 percent, translating to 10 pesewas.
Currently, a litre of petrol and diesel are going for ¢4.85, which mean a gallon should be sold at ¢21.8 so, following the proposed reduction, a gallon of petrol from June 18 could sell at around ¢21.24. A gallon of diesel is likely to be sold at the pumps at around ¢21.24.
There are currently over 90 Oil Marketing Companies (OMCs) in the country, therefore, not all the firms may reduce their prices at the pumps from June 18.
This is because the current deregulation policy has not benefited all these firms, with some industry players saying that some firms are currently struggling to stay in business because of the policy. Again, most of them recently reduced their prices at the pumps before the June 15 date review.
However, others are of the view that if the big players in the market, which are: Goil, Shell and Total, respond by going ahead to reduce prices, then there will be the likelihood of others following suit.
The outlook for crude oil prices is quite favourable, with most analysts giving a range of $50 to $60 a barrel for 2018.
So, if this outlook is anything to go by, then it can be argued that prices of petroleum products are not likely to witness any significant increase this year only if the local currency remains stable for the next half of this year.