Ghana’s producer prices for crude-oil and natural-gas extraction rose 12.2% in July from a year earlier, according to the latest Producer Price Index report from the Ghana Statistical Service.
The increase came as producer-price movements across Ghana’s mining and quarrying industry diverged sharply in July. While oil and gas extraction recorded double-digit inflation, producer prices for the mining of metal ores fell 2.3%, down from a 0.7% increase in June.
The mining and quarrying sector as a whole recorded 3.5% year-on-year producer inflation in July, up from 2.6% in June. The sector also recorded a 3% month-on-month increase in producer prices, compared with a 9.4% decline in June.
Mining support-service activities recorded producer inflation of 5.9% in July, edging up from 5.8% in June.
Diverging mining costs
The July data highlight markedly different price movements within Ghana’s extractive sector. The mining and quarrying sector carries the largest weight in the overall PPI, at 43.7%, meaning movements in producer prices across the sector have a significant bearing on the headline index.
Despite the 3.5% annual increase in mining and quarrying producer prices, the sector recorded a 3% monthly increase in July after a 9.4% month-on-month decline in June. That turnaround contributed 1.3 percentage points to the monthly producer inflation rate in July.
Within the sector, however, the direction of price movements was uneven. Crude-oil and natural-gas extraction recorded 12.2% inflation, while metal-ore mining moved into negative territory.
The report does not provide a specific explanation for the contrasting movements, so the July figures do not establish what drove the increase in oil and gas producer prices or the decline in metal-ore prices.
Broader producer-price pressures
The increase in oil and gas producer prices came as Ghana’s overall producer inflation accelerated to 4% in July from 3.5% in June. Producer prices increased 2% month-on-month during July.
Industry excluding construction recorded the strongest annual producer inflation among the major sectors at 5.6%, while construction recorded 4.8% and services 2.5%.
The July report therefore shows a mining sector in which producer-price pressures are being driven by different trends across subsectors, with oil and gas registering a substantial annual increase even as metal-ore prices declined.
