Timing of petroleum price deregulation dangerous, unsustainable – Kweku Baako

The Editor in Chief of the New Crusading Guide newspaper, Abdul Malik Kweku Baako Jnr says he is surprised that government is implementing the petroleum price deregulation now.

He noted that the timing of the implementation is problematic given the difficulties the national economy is facing.

On June 16, 2015 all Oil Marketing Companies (OMCs) started announcing their ex-pump prices for petroleum products with a four percent hike in prices. The pricing by the OMCs was the first step towards the full implementation of the National Petroleum Authority (NPA)’s petroleum product price deregulation.

“In line with the [deregulation policy], the NPA will monitor the application of the Prescribed Petroleum Pricing Formula to ensure that all Petroleum Service Providers apply the formula in the right way and defaulters will be duly sanctioned”, according to the release signed by NPA Chief Executive, Moses Asaga.

The deregulation policy is expected to allow marketers and importers of Petroleum products to set their own prices and bring an end to government subsidy on the commodity.

But ranking Member of the Finance Committee of Parliament, Anthony Akoto Osei said the 4% hikes in petroleum products is not because of a deregulation policy but rather an IMF conditionality.

According to him, the increase is part of agreements reached with the International Monetary Fund (IMF) for a review in petroleum products every two weeks.

Kwaku Baako speaking on Joy FM and Multi-TV’s news analysis programme, Newsfile Saturday, said petroleum price deregulation began before the advent of the Kufuor administration and various governments have not been able to implement it.

“There hasn’t been the sufficient political will to operationalise it. Various governments at different times have been forced by the economic reality, the harsh conditions, to put a freeze on some of those things,” he explained.

The Editor further explained that, “In this ‘Dumsor’ environment, it is not easy when you hike petroleum prices in terms of cost of production. First of all, we are all using generator sets for some quite part of the day now that is cost and that cost will reflect in prices in different areas.”

He warned that, “in terms of the timing, it’s a very bold but dangerous policy direction given the kind of economic dynamics that we are operating in…”

Kweku Baako noted that, the ripple effect of the price hike at this time will be high cost of production in so many areas.

“I’m not sure that in terms of the economic circumstances of today this option is sustainable. It might be an inevitable thing to do because within the context of the economic structures we are operating but sometimes you need to bring your political skills in terms of timing – what to do and how to do it. I have a little difficulty with the timing,” he added.

Story by Ghana | Myjoyonline.com | Ernest Dela Aglanu (Twitter: @delaXdela / Instagram: citizendela)


More Business & Finance »


Comments:
This article has 2 comments, leave your comment.

Comments