Fuel costs to extend from Feb. 1, pushed through cedi depreciation and emerging crude costs – Life Pulse Daily
Editor-in-chiefJanuary 31, 20264 Mins read17
Fuel Costs to Increase from February 1: Cedi Depreciation and Rising Crude Prices Drive Hike
Introduction
Ghanaians are bracing for a significant increase in fuel prices starting February 1, 2026, as the depreciation of the Ghanaian cedi and surging global crude oil prices combine to push pump prices higher. This marks the first anticipated fuel price hike in the new year, according to the latest outlook from the Chamber of Oil Marketing Companies (COMAC), which guides pricing decisions for oil marketing firms. The development has raised concerns among consumers and businesses alike, as fuel costs directly impact transportation, goods, and overall economic activity.
Key Points
- Fuel prices are set to rise from February 1, 2026, due to cedi depreciation and global crude oil price increases.
- Petrol prices are projected to increase by up to 2.10% per litre, reaching approximately GH¢11.48.
- Diesel prices are expected to rise by 4.00-5.10%, with a litre likely to sell for around GH¢12.77.
- Liquefied Petroleum Gas (LPG) is anticipated to increase by 0.61%, resulting in a kilogram selling at roughly GH¢13.50.
- The cedi depreciated by about 4% against the US dollar in January 2026.
- Global crude oil prices surged from $64 to nearly $70 per barrel within two days during the review period.
Background
The projected fuel price increases stem from two primary factors: the weakening of the Ghanaian cedi and the rise in international crude oil prices. The cedi has faced mounting pressure since the beginning of 2026, driven by increased demand from businesses restocking for the year and foreign companies making transfers in line with dividend payments. According to the Bank of Ghana’s January Economic and Financial Data, the cedi depreciated by approximately 4% against the US dollar during the period.
Simultaneously, global crude oil prices have experienced a sharp uptick. COMAC data reveals that crude oil prices surged from about $64 per barrel to nearly $70 per barrel within just two days during the review period. This rebound in crude prices has occurred despite expectations of a global supply glut, supported by disruptions to Kazakh exports, tightening conditions in international energy markets, and renewed US threats against Iran.
Analysis
The interplay between currency depreciation and rising crude prices has created a challenging environment for fuel pricing in Ghana. The cedi’s depreciation against the US dollar has directly impacted the cost of importing petroleum products, as most are priced in dollars. For the February 1 pricing window, the cedi weakened from GH¢10.90 to GH¢10.98, representing a 0.77% depreciation.
On the global front, crude oil prices have rebounded significantly this year. COMAC noted that prices rose from about $62.50 per barrel to $67.40 per barrel in early February. This surge has been accompanied by increases in international refined petroleum product prices, with petrol prices rising by 2.12%, diesel by 6.73%, and LPG by 3.66% during the review period.
Despite these pressures, COMAC highlighted that intense competition in the downstream petroleum sector could lead many oil marketing companies to keep pump prices unchanged. This competitive dynamic has become increasingly important for oil marketing firms over the past two years, given its impact on sales volumes, market share, profitability, and strategic planning.
Practical Advice
For consumers and businesses affected by the impending fuel price increases, here are some practical steps to consider:
1. **Budget Adjustments**: Review and adjust your budget to account for higher fuel costs. This may involve cutting back on non-essential travel or finding more fuel-efficient routes.
2. **Fuel-Efficient Practices**: Adopt fuel-saving habits, such as maintaining proper tire pressure, avoiding aggressive driving, and reducing vehicle weight.
3. **Alternative Transportation**: Explore alternative transportation options, such as carpooling, public transit, or cycling, to reduce fuel consumption.
4. **Monitor Price Trends**: Stay informed about fuel price trends and plan purchases accordingly. Some oil marketing companies may delay price adjustments, offering temporary relief.
5. **Energy-Efficient Appliances**: For households using LPG, consider investing in energy-efficient appliances to reduce overall consumption.
FAQ
Why are fuel prices increasing in Ghana?
Fuel prices are increasing due to the depreciation of the Ghanaian cedi against the US dollar and the rise in global crude oil prices. These factors have raised the cost of importing petroleum products.
How much will fuel prices increase?
Petrol prices are expected to rise by up to 2.10% per litre, reaching approximately GH¢11.48. Diesel prices are projected to increase by 4.00-5.10%, with a litre likely to sell for around GH¢12.77. LPG is anticipated to increase by 0.61%, resulting in a kilogram selling at roughly GH¢13.50.
Will all oil marketing companies increase their prices?
While the projected increases are significant, intense competition in the downstream petroleum sector may lead some oil marketing companies to keep pump prices unchanged. Some firms may delay price adjustments to monitor how major players respond.
How does cedi depreciation affect fuel prices?
The depreciation of the cedi against the US dollar increases the cost of importing petroleum products, as most are priced in dollars. This directly impacts the final pump price for consumers.
What can consumers do to mitigate the impact of higher fuel prices?
Consumers can adopt fuel-efficient practices, explore alternative transportation options, and adjust their budgets to account for higher fuel costs. Staying informed about price trends can also help in planning purchases.
Conclusion
The anticipated fuel price increases from February 1, 2026, underscore the challenges facing Ghana’s economy, particularly the impact of currency depreciation and global oil price volatility. While the projected hikes are significant, the competitive dynamics in the downstream petroleum sector may provide some relief as companies navigate pricing decisions. For consumers and businesses, proactive measures such as budgeting, fuel-efficient practices, and exploring alternative transportation options can help mitigate the impact of higher fuel costs. As the situation evolves, staying informed and adaptable will be key to managing the economic implications of these changes.
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