Fuel Price Hikes, Weak Cedi Put Airline Industry Under Strain

Players in the Aviation industry say they are hard hit by the high cost of fuel praying for urgent relief from government to cushion them.

From the beginning of the year to now, there has been an increase of 112 percent in aviation fuel, Corporate Affairs Manager of Passion Air, Samuel Takyi, told B&FT.

“With the aviation fuel, for example in May we purchased fuel to the tune of US$350,000 for our operations. In June it shot up to US$750,000,” he bemoaned.

The problem, according to him, is exacerbated by the Cedi slide, as 98 percent of their transactions are quoted in foreign exchange, but tickets are sold in cedis.

“So, once you covert the cedi to dollars you take a hit right there,” he added.

The Institute of Energy Security is predicting an insignificant drop in fuel prices on the Ghanaian market despite the drop in global fuel prices.

IES said this will be so if the cedi remains weak against major trading currencies.

Crude Oil price has dropped by 4% in recent weeks however, the cedi continues to struggle on the forex market as it closed trading close to 10 cedis per dollar.