Pressure deepens on NPA to cut petroleum prices further from 10%

An economist at the University of Ghana Business School, Dr. Osei Assibey, has added his voice to calls for further price cuts in prices of petroleum products.

Mr Assibey says just 10 percent reduction defeats the whole rationale behind the deregulation policy and the automatic adjustment formula (AAF).

“If at one point you make an excuse that we have to go back to the automatic adjustment when [crude oil] prices are going up… but on the other hand when prices are coming down then you begin to advance reasons and justifications for why it shouldn’t go down then you are actually losing credibility with regards to that formula”, he said.

He said whatever be the case the automatic formula should be allowed to work.

Otherwise, he said, the AAF should be renamed “updated adjustment formula” if the price of crude oil on the international market will not reflect in prices the NPA sets.

After many weeks of insisting it won’t reduce prices of petroleum products in the wake of falling global price of crude oil, the NPA finally cut the price of all petroleum products by 10% last Wednesday.

According to the NPA, the decision to review the petroleum prices took a “balance position of continuous effort to reduce outstanding under-recoveries and at the same time reflect falling prices of petroleum products on the world market”.

However, had the NPA used the Automatic Adjustment Formula (AAF) to review the prices, the reduction would have been higher than 10%.

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