Home » Breaking News » Anger over fuel price hikes
Hon. Boakye Agyarko, Minister for Energy
Hon. Boakye Agyarko, Minister for Energy

Anger over fuel price hikes

Ghanaians are groaning over the current upward adjustment in fuel prices and want government to remove taxes on the products in order to reverse the trend.

They believe government has the power to control the surge in the fuel prices by reviewing taxes and other levies on the products to make them cheaper for consumers.

In particular, they said, scrapping the taxes and levies such as special petroleum tax, the price stabilization and recovery levy, would minimize the adverse effect the increment is having on their businesses and further revive the confidence they have in the government.

Available data a from the National Petroleum Authority shows that there are about 10 different kinds of taxes and levies on petroleum products, which could partly be attributed to surge  in the price of  the product.

Current figures from some fuel stations over the weekend show that, prices of petrol and diesel have hit a crescendo, with petrol selling at an average of GHc4.29at the pumps, and diesel going for an average of GHc4.23 per litre.

Speaking recently, a principal research analyst at IES, Mr Richmond Rockson, pointed out that the adverse effect of the increment in fuel prices on consumers could be minimal if government scraps some of the taxes.

Mr Rockson submitted on citifm “the first thing that should go is the special petroleum tax. I don’t think that there is any need for government to impose 15 percent there. There is no point in that. Some of them can also be reviewed; I don’t see why the road fund should be 40 pesewas, it’s too much. The price stabilization and recovery levy must also go, especially when government is passing the cost on to consumers. There is no point keeping that in there as well,” he added.

Mr. Rockson attributed the increment on the surge in crude prices on the international market as well as the depreciation of the Ghanaian currency – the cedi.

He added, “When it comes to fuel pricing we know that there are a number of indicators that we all look at – one of the critical things that we look out for is our cedi, thus the exchange rate as compared to the dollar. Over the period, the cedi has been depreciating marginally and from May till date – ten consecutive windows—it’s only one [window] that we had a stable currency.

In all the other nine, the cedi depreciated and we’ve been mentioning this every time. As we speak, the average exchange rate is 4.48 pesewes from a previous average of 4.44 pesewes, and this is really troubling because the effect it has on fuel pricing is that, it’s going to push prices up instead of pushing it down.”He said “crude oil prices have also surged” adding that “as we speak, we are doing about 55 dollars from a previous average of 52 dollars per barrel, a depreciation of about 3%.”

“For a benchmark for finished products for gasoline and gas oil, they’ve also gone up, in this particular window they went up by 14% for gasoline and for gas oil it went up by 8%. This is what has accounted for the increment in this month [September],” Mr. Rockson explained.

The upsurge  in  the   Fuel prices had triggered  some aggrieved drivers to  in Accra an  other  part  of  the country demand a  reduction in the  prices  of  the product.

On Wednesday the Chairman of a union known as the Wisdom Taxi Union, Kwesi Arhin, lamented that life was considerably easier for drivers under the National Democratic Congress (NDC) government.

“During former President John Mahama’s era, one gallon of fuel was being sold at GHc 14, then candidate Nana Addo came to our station and promised to reduce the price when voted into office.”

“Since Nana Addo took office, he has done well, but the current increment in fuel prices is not helpful at all. We are pleading with Nana Addo that at last, he can bring the fuel price back to the GHc 14, as it was being sold for during Mahama’s era,” Mr. Arhin pleaded.

Commercial drivers nationwide have raised concerns about the fuel price increments, with drivers in the Volta Region recently complaining about the unannounced increment, which they said is killing their business as the increases do not always tally with transport fares.

Things may not get worse for the drivers as the Institute of Energy Security (IES) is predicting fairly stable fuel prices for the first pricing window in October 2017.

The surge in fuel prices was blamed on, among other things, the multiple taxes and margins slapped on the products.

This has compelled some groups and policy think tanks including the IES and the Chamber of Petroleum Consumers, to call on the government to review the taxes to make the products cheaper on the Ghanaian market.

But the Chief Executive Officer of the National Petroleum Authority (NPA), Hassan Tampuli, is adamant, insisting that the taxes are in the interest of consumers and cannot be removed.

 

By Mohammed Suleman  

 

x

Check Also

Road contractors warn of increased stalled projects across country

Eighty percent of road projects being pre-financed by Ghanaian contractors across the country have stalled, ...