By Mabinty M. Kamara
The pump price of petroleum products is to increase by Le 500 to Le 10,000 a litre effective later this week, according to sources close to the industry.
One source who cannot be named because they are not authorised to talk on the matter says the five percent increase has been necessitated by a long-agreed formula between the dealers and the Petroleum Regulatory Agency that only a five percent (or more) an increase or decrease in the global price should lead to an increase or decrease in the pump price locally. This was why there was twice a reduction in prices at the height of the Covid19 pandemic when global prices plummeted.
The source however assures that the new price will not lead to any panic buying that may generate possible hoarding of petrol or diesel.
Another source close to the regulatory agency says that even with the pending price increase Sierra Leone still has the lowest pump price for fuel products in the Mano River Union countries of Liberia, Guinea and Ivory Coast.
The current pump price took effect on 1 July when it increased from Le 8, 000 to Le 9,500. This received a mixed reaction from the public with many pointing at its potential economic effect on the process of other goods and services.
The increase at the time, according to the government, was also influenced by a number of factors including smuggling, lack of adequate storage facility to house the required amount of fuel for the population and non-government participation in the importation, storage and distribution of petroleum products.
“Sierra Leone consumes in excess of 1.1 million liters of petroleum products per day. Sierra Leone can only store 40% of what is used per day. There is frequent replenishment; we replenish the stock every two weeks. People, therefore, tend to hoard or speculate against the availability of petroleum products,” a fact sheet presented to editors at a meeting with government officials reads.
It adds that the prices of petroleum products are determined by a combination of international oil reference price (PLARTS) and the foreign exchange rate.
The country’s only Oil Refinery at Kissy which had remained desolate and abandoned for decades was said to have been rehabilitated and almost ready for use. Experts say when it becomes operational and starts processing the imported crude oil, it will be a huge boost towards stabilising the price of petroleum products in the country.
The plant could also provide more storage for the processed products, a provision which has been lacking and said to have been responsible for world market price increases having immediate effect on the local market.
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