Based on global trends, fuel price will climb to Le20,000 per litre in the next few months despite it was raised to Le18,000 just last week.
According to international oil experts, Russia’s invasion of Ukraine is said to be one of the contributing factors for the rise in fuel prices in the world. Russia is one of the three major oil producers in the world.
Crude oil prices lower breached the US$100 mark for the region first time since 2014.
Big countries like the United States of America removed about 60 million barrels from their reserves but that did not stop the runaway fuel prices.
In Sierra Leone, the monthly consumption of petrol is sales 20,771,838 litres while that of diesel is 21,594,074 litres.But with only two petroleum jetties at Kissy Terminal, east of Freetown, and high cost of the storage has always been a problem.
Before it was raised to Le18,000 per litre Sierra Leone was having lower fuel prices, relatively below instead regional average.
So, it was obvious that the government was subsidizing neighbouring countries and other large fuel corporate companies.
The lower pump prices in Sierra Leone attract abnormally higher sales volume which threatens the budgeted import volume by oil marketing companies. This also to leads to frequent replenishment and high cost of holding.
A significant portion of benefits from fuel subsidies are not received by the intended beneficiaries in Sierra Leone, instead the products are captured by smugglers and black- marketers. It is more profitable for smugglers to buy subsidized fuel domestically on the black market, and then smuggle it and sell at market rates in neighbouring countries. This means that Sierra Leone’s stocks have been depleted faster and led to shortages and panic buying. One source at the Bank of Leone told this newspaper last evening that the central bank’s Foreign Exchange allocation to oil marketing companies between March to May 2022 was US$47 million, while the oil marketing companies monthly foreign currency demand is reportedly US$30 million.
When this newspaper contacted one of the main dealers in petroleum products in the country, he disclosed that though the pump price for fuel would be Le20,000 in the next few months; it was likely that before December this year it would be around Le25,000 per litre.