The turmoil in Libya has pushed oil prices near two and a half year high, as the basket of crude oil of the Organization of Petroleum Exporting Countries (OPEC) rose above $100 a barrel for the first time since the global financial crisis.
CNN's Jim Boulden explained that Libya is an OPEC member, with the largest proven oil reserves of any African country and an important source of oil for European countries and China, 32 percent of Libyan oil exports go to Italy, 14 per cent to Germany, 10 per cent to France and China and five per cent goes to the U.S.
The NPA had indicated its readiness to increase fuel prices if crude oil stays above $100 within two pricing periods that is two fortnights or one month.
Alex Mould, Chief Executive Officer (CEO) of NPA said that his outfit will monitor price of crude oil on the world market for two pricing periods and that if there was the need to increase fuel prices it will advise government accordingly.
The current pump price is based on the world market price of between $90 and $95.
He emphasized the need to implement the full cost recovery policy instituted somewhere in 2003 to ensure that certain losses, known as under recoveries, which led to the huge debt of Tema Oil Refinery (TOR), were not encountered.
Prices of petrol and diesel, which are currently going for GH¢6.80 and GH¢7.00 per gallon respectively will be increased accordingly.
The price of kerosene and Liquefied Petroleum Gas (LPG), which is used by most commercial vehicles, will also shoot up.
LPG and kerosene are being sold at 104.76 per kilogramme and 91.0 per liter. The recent 30 per cent hike in fuel prices led to an increase in transport fares in the country, which affected most economic activities.
However, concerns have been raised by many people about the effectiveness of the Commodity Price Risk Management Policy or Oil hedging policy.
Some people have also expressed worry about the impact of the rising price of the most important commodity on the world's economy.
Russian President Vladimir Putin said the rising price of the commodity could pose a serious threat to global growth.
Oil reached $147, its highest price ever somewhere in 2008 before dropping to about $70 some four months later.
Analysts at BNP Paribas said that it was revising its outlook and expected Brent crude to continue trading at its current high level.
The bank predicted an average price of $117 a barrel in the second quarter of this year. 'Given the level of uncertainty, the revision is a conservative stab in the back,' it said.
Deutsche Bank also said that if Brent crude oil sells above $120 a barrel it will be a turning point for global economic growth. 'Oil is certainly edging closer to a level that is viewed by our colleagues as a key threat to global growth,' Deutsche said in a research note. For the latest updates PRESS CTR + D or visit Stock Market news Today
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