Petroleum prices up 25/30 percent

The price of petrol and diesel in Ghana will rise 30 percent on Tuesday to account for rising oil prices and help pay off debt owed by the West African country’s oil refinery, authorities said on Monday.

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A price hike had been expected after it was flagged in Ghana’s 2011 budget, approved late last year.

Diesel will rise to 1.53 ($1.03) cedis per litre while petrol will also rise 30 percent to 1.52 cedis per litre, said National Petroleum Authority chief Alex Mould said in a speech, a copy of which was posted on the website of local redio station Joy FM.

“These changes to the ex-pump price are inevitable due to the constant rise of crude oil on the world market,” he said, adding that the rise would be implemented from 0600 GMT on Tuesday.

Oil prices rose to a 27-month peak over $92 per barrel on Monday as upbeat European and U.S. manufacturing data and forecasts for cold weather reinforced optimism about economic and energy demand growth.

Mould said that fuel prices in Ghana had remained unchanged since October 2009, during which time the price of oil had risen some 23 percent. The prices of kerosene and premix fuel remain unchanged, he added.

Problems at the Tema Oil Refinery (TOR) are also behind the price hike, Mould said.

“One of these factors is the TOR debt recovery levy which Parliament approved before Christmas. The objective will be to retire debts owed by the country’s only refinery,” he said.

This year’s budget saw levies on fuel ear-marked for repaying Tema’s debt rise to up to 0.08 cedis per litre from 0.02 cedis.

The refinery, Ghana’s sole fuel producer, was shut for much of 2009 and parts of 2010 due to problems acquiring credit to purchase crude oil.

Ghana last month joined Africa’s club of oil-producing nations with the start-up of its offshore Jubilee field with reserves estimated up to 1.5 billion barrels.

There are high hopes the nation will avoid the resource curse that has struck other African oil-rich countries and oil is expected to lead to economic growth doubling to 12.3 percent this year.

But the country has started pumping out without a legal framework defining how much of the proceeds can be spent and some, including the IMF, have scaled back their projections of the potential boom oil will have on the economy.