Government would consider reducing the price of petroleum if the current reduction in the price of crude oil on the international market is consistent for the next three months, sources within government have disclosed to Business Week.

The Kufuor administration froze the upward review of petroleum product prices in May when the price of crude oil hit US$147 per barrel, but this has also halted any downward adjustments now that prices are falling.

For now government has no immediate plans to review prices of petroleum downwards in line with the reduction of crude oil on the international market as has been anticipated. Crude oil prices have dropped to below US$ll0 per barrel.

According to Kwaku Kwateng, Government Spokesperson on Finance, government needs to recoup the revenue loss during the period that prices peaked.

Meanwhile, it is feared that the escalated violence in the Nigerian Niger-Delta region might send crude oil prices soaring again as militants aggrieved with insufficient share of oil revenues have vowed to stop oil production in the region.

Nigeria is one of the world's major oil producers, and any disruption in its supply might destabilize world market prices.

Government has considered several options to mitigate the high prices of crude on the international market.

These measures include hedging, mortgaging and forward trading of the crude oil discovered at Cape Three points in the Western Region.

Indeed, Ghana's import bill has risen due to the higher price of crude oil on the international market.

For the first half of 2008, oil imports amounted to US$1,257.0 million representing 25.4% total imports compared with US$846.6 million representing 24.4% of total imports for the same period of 2007.


Source: Business Week