‘There’s a lot of attention on diesel at the moment’ – NPA explains supply pressures, impact on prices

Diesel supply is under pressure as disruptions to Russian production force countries to seek emergency supplies, the National Petroleum Authority (NPA) has said.

Abass Tasunti, the NPA’s Director of Economic Regulation and Planning, said the scramble for diesel had prompted moves to release strategic reserves and protect domestic stocks.

Speaking on Joy News’ PM Express Business Edition on Thursday, he cited supply constraints and ongoing attacks on Russian refineries as key concerns.

“And so, there's a lot of attention on diesel at the moment.”

Mr Tasunti explained that Russia’s role as a major diesel supplier to Europe made disruptions to its output significant for the wider market.

“So sometimes when the major supply sources are shut or are closed, we don't have enough products on the market, and so it will cause, of course, economics comes in supply and demand factors.”

He said Western restrictions on Russian diesel had redirected supplies to other markets. Ghana and other African countries had benefited from those flows.

However, he said attacks on Russian refineries had knocked out about 30% of the country’s diesel supply. Russia subsequently restricted exports to meet its own needs, further tightening availability.

According to Mr Tasunti, European countries had agreed to release about 42 million barrels of diesel from strategic reserves over three months. He said France would contribute about 10 million barrels, while Spain had confirmed about four million barrels.

He described the releases as a short-term response to the shortage. He cautioned that continued attacks on Russian refineries left prospects for additional supplies uncertain.

Mr Tasunti also explained why Ghana’s liquefied petroleum gas (LPG) prices could fall even as international prices rose.

He said Ghana’s LPG tender programme typically secured a cargo sufficient for one month. The import price remained fixed for that period.

“And so, the price at which the product was imported is locked in for that one month period.”

That arrangement, he said, had cushioned consumers against a sharp increase in the next pricing window. The available LPG had been bought at a lower price earlier.

However, the same arrangement could also delay the effect of price changes. Mr Tasunti said a previous LPG increase reflected the higher cost of a replacement cargo after the earlier month-long pricing period ended.