Business News of Tuesday, 26 September 2017
Source: Graphic.com.gh
2017-09-26
Boakye Agyarko, Energy Minister
Government says it has little control over the rising fuel prices in the country that has caused public outcry, particularly among transport operators.
While the prices of petroleum products are largely influenced by the world market price of crude oil, the tax element at the pump constitutes more than half of the ex-refinery price.
Though the rising prices have been attributed to the current 11 taxes on petroleum products, Energy Minister Boakye Agyarko told the Daily Graphic that it would not be prudent to isolate one variable in the fuel build-up without a comprehensive analysis of the price.
“The international market component is usually a demand-and-supply function, which is often affected by other geopolitical developments across oil producing countries,” he told the Graphic.
The last four petroleum pricing windows have seen an average cumulative increase of about 9.84 per cent for a litre of petrol that used to sell at GH¢3.68.
According to the Graphic, every litre of petrol now sold around GH¢4.39 has a tax component of GH¢2.17, constituting about 49 per cent of the ex-pump price.
This translates into GH¢27.132 million a day per the national daily petrol and diesel consumption of 10.2million litres.
The situation has triggered calls on the government and stakeholders to scrap some of the taxes which have been described many as nuisance.
The Chamber of Petroleum Consumers (COPEC) wants the government to rethink some of the taxes with the view to reviewing petroleum prices downwards.
Executive Secretary of COPEC, Mr Duncan Amoah, said the chamber took a very serious view of the recent increases in fuel prices and called for a review of some of the taxes to give consumers some respite.
“It will be difficult to accept that the government cannot reduce taxes on petroleum products, especially at a time when world market figures are rising and a lot more revenue will be made from our petroleum exports from the Jubilee and the TEN fields.
“It is, indeed, worrying that so many taxes continue to exist in the price of petroleum products,” he said. COPEC disagrees
Mr Amoah disagreed with the Energy Minister on his assertion that government has little control over the taxes, whose actual use or basis for collection was non-existent.
“For instance, the price stabilisation and recovery levy which is currently charged at 12Gp per litre on petrol and 10Gp per litre on diesel was put as a containing measure to stabilise prices in the unlikely event of shocks and fluctuations on the international market and could be varied downwards to stabilise prices,” said Mr Amoah.
That levy, he said, had since 2001 neither been used nor adjusted to help prices stabilise when fuel prices had been disturbing, as prevailing now, and had continued to remain the same at 12Gp per litre.
Again, he said, the primary distribution margin of 7.5Gp charged per litre, which was meant to ease the burden on importers of petroleum products to be able to sell at even prices across the country, irrespective of the region, was currently not used for that purpose and oil marketing companies (OMCs) were having to pay different quotations for products in different depots.
“Calls for the fixing of a specific amount in respect of the special petroleum tax (SPT) have not been heeded to till date.
“The SPT continues to be a huge burden on both OMCs and consumers, as the 15 per cent variable increases anytime there is an increase in any of the variables, such as the world market price or the forex differential.
“Unfortunately, the consumer is paying for such taxes which are hardly of any benefit to the people,” Mr Amoah said.
Litany of taxes
The tax variables that determine the price of fuel in the country include a 41Gp energy debt recovery levy and 40Gp per litre road fund levy.
There are also an energy fund levy of 1Gp per litre, price stabilisation and recovery levy of 12Gp per litre, a primary distribution margin of 7.5Gp per litre and a Bulk Oil Storage and Transportation (BOST) Company margin of 3Gp per litre.
Other levies are the fuel marking margin of 2Gp per litre, a special petroleum tax of 52Gp, a unified petroleum price fund of 13.5Gp per litre, a marketers’ margin of 20Gp and a dealers’ (retailers/operators) margin of 25Gp per litre.
