Ghana faces potential fuel price hikes amid Middle East tensions – ACEP warns

Ghana could be on the verge of higher fuel prices if the ongoing conflict in the Middle East escalates, the Executive Director of the Africa Centre for Energy Policy (ACEP), Benjamin Boakye, has warned.

Speaking on Joy FM’s Top Story on Monday, Benjamin Boakye highlighted the direct link between international crude oil prices and domestic fuel costs, stressing that recent tensions involving the United States, Israel, and Iran have already triggered market anxiety.

“International oil prices have jumped nearly eight percent in recent days,” Boakye noted. “If the conflict intensifies, you can expect prices to go even higher.”

He cautioned that while Ghana may not immediately face fuel supply shortages, the country remains highly exposed to global market fluctuations, which are automatically reflected in local pump prices unless the government intervenes.

The fuel pricing system operates on a pass-through mechanism, meaning that increases in global crude prices are usually transferred directly to consumers.

Boakye explained that government interventions, particularly on the tax component of fuel prices, can cushion the impact, but only up to a certain threshold.

“Industry players will seek to recover their costs. Unless there is intervention from government on taxes, increases will be passed on to consumers. But even government has limits when prices rise beyond a certain margin,” he said.

The ACEP boss highlighted the unpredictability of the Middle East crisis, noting that renewed hostilities have dashed earlier hopes for diplomatic resolution.

“It is largely in the hands of the US, Israel, and Iran. We do not know the strategy or how this will unfold. Many believed negotiations were ongoing, and suddenly, we are seeing renewed hostilities. That uncertainty is what makes the market nervous,” he explained.

Benjamin Boakye emphasized the need for close monitoring of global crude benchmarks and potential production adjustments by major oil-producing nations. Any attempts to stabilise the market could help mitigate local price pressures.

“De-escalation remains the most critical factor in preventing further strain on fuel prices and protecting consumers from additional economic hardship,” he said.

He warn that prolonged instability in the Middle East could push inflation higher, increase transportation costs, and have broader economic repercussions for Ghana and other African nations reliant on imported oil.