Accra Street Journal — Ghana’s hard-won disinflation momentum could be derailed in the coming months as fresh pressures from rising fuel and utility tariffs cloud the path toward the Bank of Ghana’s single-digit inflation target.
According to the Ghana Statistical Service, inflation declined to 13.7% in June 2025, from 22.8% a year earlier, driven by tight monetary policy, improved food supplies, and favorable base effects. However, analysts warn that structural cost increases in fuel and electricity could stall further disinflation or even reverse recent gains.
“While disinflation has been sustained, domestic cost pressures in energy are creating new challenges for policymakers,” notes the Accra Street Journal economic analysis desk.
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Fuel Prices Climb Despite Global Oil Dip
In the second pricing window of July, key Oil Marketing Companies such as Star Oil raised petrol and diesel prices by 6.5% and 9% respectively, despite a nearly 5% decline in global Brent crude prices.
The Chamber of Petroleum Consumers (COPEC) attributes the increase to three key factors:
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A marginal cedi depreciation against the US dollar,
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A hike in Free on Board (FOB) prices,
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And the introduction of a new GHS1 Energy Sector Recovery Levy.
This divergence between global and domestic price trends illustrates how local fiscal and FX dynamics are becoming primary inflation drivers.
Utility Tariffs Compound Inflation Risks
In addition to fuel, upward revisions in electricity tariffs are also weighing on consumer costs. On July 1, 2025, the Public Utilities Regulatory Commission (PURC) approved a 2.45% average increase in electricity rates, continuing a trend of quarterly hikes.
With the Electricity Company of Ghana (ECG) advocating for stronger cost recovery, market observers warn of further utility increases, particularly as debt levels and operational costs rise.
“If electricity tariffs continue to inch up alongside fuel prices, we could see core inflation persist above the central bank’s 6–10% medium-term target,” analysts told Accra Street Journal.
Crude Oil Volatility Adds Uncertainty
Although Brent crude has retreated to around $71 per barrel, forecasts remain fluid. Analysts project a potential rebound toward $80 per barrel in Q3 and Q4, driven by seasonal demand and possible production cuts from OPEC+.
Any external shocks to oil prices—combined with a fragile exchange rate—could cascade into the local market through Ghana’s deregulated fuel pricing system, offering little room for price control.
Policy Implications and Credibility at Stake
According to Accra Street Journal, macroeconomic stability hinges on how well monetary, fiscal, and regulatory agencies coordinate to manage these cost pressures.
A resurgence in inflation could force the Bank of Ghana to delay interest rate cuts or even tighten policy further, affecting credit conditions, private investment, and broader economic recovery.
“Ghana’s disinflation trajectory is not guaranteed. Energy costs and tariffs must be watched closely, or the single-digit target may remain elusive,” the paper cautions.
Last Updated on July 19, 2025 by Samuel Kwame Boadu
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Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.
