One of the leading Civil Society Organisations in Sierra Leone, Native Consortium and Research Center has called on the Petroleum Regulatory Authority (PRA) to reduce the pump price of fuel to Le 15 Per Liter, which they say is quintessential proportionate to the 30% fall in the price per barrel and the cut in shipping cost.
The Civil Society Organisation made this call in a press release issued on Sunday 24 July 2022, and signed by Executive Director, Edmond Abu Jnr.
According to Native Consortium, their assertion and calculation remain unchallenged a week ago that Sierra Leone still sells at the highest pump price in the sub-region and even with the Le 20 reduction.
“The consortium still maintains its stand and stands by its arithmetical assertions which has not been disapproved or challenged by any authority or expert to counter our calculations and assertion that Sierra Leone even at Le 20 we still sell at the highest pump price of petroleum product in the sub-region because we increase the pump price by 120% morethan any Country in the sub-region during the Russian invasion into Ukraine war,” they stated.
The CSO furthered that, “International price has fallen by more-than 30% not 9% as claimed by the PRA Boss on Radio D 98.1, whilest the variables like refinery and freight levy cost which are the major cost constraints on the supply chain remain relatively constant and do not increase or decrease with the changes in the world market prices contrary to the claims by the Trade Minister”
The Consortium went on to call out the PRA Boss, stating that his assertion on the 98.1, Good Morning edition that world market price has only reduced by 9% is fundamentally flawed, disingenuous and misleading the public.
‘We keep wondering if the very PRA Boss is clueless about the international oil price dynamics and percentage (%) reduction then the consortium wonder how will the PRA regulate the mafia Oil Marketing Companies (OMCs)?” The CSO asked.
The Consortium noted that at a time when the fuel price was Le 10 ( Le 10,000) per liter before the Russia invasion into Ukraine, the international price was at an average of $ 65 per barrel, adding that the Russian invasion jumped Oil price to as high as $ 140 per barrel at the height of the invasion in March to April this year.
“Now, if fuel prices keep plummeting gradually from $ 140 to $ 130 and now it staggers within $ 100 to $ 105 per barrel even when world leaders like Joe Biden are leveraging on the reduction and calling for $ 20 on the price per barrel if you sit in a radio studio here and call such percentage 9% then the Consortium won’t be surprised why our pricing formular is always a mumbo jumbo,” they added.
“We also want to deconstruct and lay to rest this misinformation put out by the Trade Minister Dr Hinger Sandy by extension PRA that the refinery cost and freight charges also drive the price materially. Two things come to mind each time we hear the Trade Minister put out this unjustifiable claims. It’s either the OMCs are misleading the Trade Minister and PRA to make a profit, or the Minister or PRA is out of Vogue with the reality on the supply chain and they have pushed the same to let President Bio even believe in this narrative as if Sierra Leone is the only country affected by supply chain in West Africa. Remember, Sierra Leone, Guinea, Liberia we all buy from the same suppliers in the high seas, but Guinea and Liberia only increase their pump price by only 20% and 30% respectively whiles Sierra Leone increased by 120%,” the CSO noted.
The Consortium stated that the major cost drivers in the supply chain are the freight cost and cost of refinery, noting that Sierra Leone like Liberia and Guinea buys the refiner product so any increase or decrease in the world market has little or no effect on the cost of refinery, except if there is a major global shift like the global corona pandemic which brought the world economies to a grinding halt.
The CSO further revealed that Sierra Leone has been removed from the black list for High cost of risk insurance on shipment and demurrage has been removed from the black list.
“Lastly, the high risk insurance cost on shipment for vessels coming into Sierra Leone is no more because the Government under President Bio leadership has recently removed Sierra Leone from the international black list of Countries with high risk countries shipping or freight cost on vessel,” the Consortium stated.
The Consortium concluded by enforcing their position that the two major drivers for oil price are OPEC Price and our Local Exchange Rate, adding that, the performance of the Bank Governor has a lot to do with fuel prices.