• IES urges government to act to reduce the impact of rising fuel prices on Ghanaians.

• Think tank warns higher fuel prices could push up transport fares, food prices and inflation.

• IES calls for cedi stability to help keep fuel prices under control.

In a statement issued on Monday, August 3, the energy policy think tank said the continued rise in petroleum prices was imposing “significant financial hardship on households, businesses, and transport operators” across the country.

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According to IES, the impact of higher fuel prices extends beyond motorists, as petroleum products remain a critical input for transportation, agriculture, manufacturing and commerce.

“Since fuel is a key input in transportation, agriculture, manufacturing, and commerce, sustained increases in pump prices inevitably translate into higher transport fares, rising food prices, increased production costs, and renewed inflationary pressures,” the statement said.

It added that the combined effect of these increases was “a further erosion of household purchasing power and increased pressure on businesses, particularly small and medium-sized enterprises.”

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While acknowledging that domestic fuel prices are largely influenced by international crude oil prices, exchange rate movements and the country’s petroleum pricing framework, IES argued that government should not remain passive when external factors threaten the economy.

“Government cannot remain passive when external shocks threaten the welfare of citizens and the stability of the economy,” the institute stated.

IES recalled that earlier this year, the government introduced measures that reduced fuel prices by about GH¢2.00 per litre to shield consumers from rising petroleum costs.

“That intervention demonstrated Government’s commitment to protecting Ghanaians from the full impact of petroleum price volatility and underscored the importance of timely policy responses in periods of rising fuel prices,” it noted.

The institute said current market conditions justify a similar intervention, urging the government to “immediately engage stakeholders and implement same relief measures to mitigate the impact of the current price increases.”

IES also called on the government to intensify efforts to stabilise the Ghana cedi, describing exchange rate depreciation as one of the biggest drivers of domestic fuel price increases.

It said a stable local currency would help reduce the impact of global oil price volatility on fuel prices in Ghana.