Business News of Thursday, 14 June 2018
Deputy Minister of Energy in charge of Petroleum, Dr Mohammed Amin Adam is projecting a marginal reduction in the price of petroleum products.
The next review period is expected to happen from 15th June.
Petroleum Products have witnessed a sustained increase in price over the past months, resulting in transports fares going up. But Dr Amin tells JoyBusiness government’s forecast suggest prices would be trending downwards.
He added that “By our projections, I can assure you that by the next window prices to start coming down.”
“We’ve looked at the trend in prices, we’ve also looked at the arrest of the depreciation of the cedi, the marginal depreciation and if these fundamentals are right, we should see by the next pricing window our prices are coming down.” The deputy minister added.
The Deputy Minister also added that other measures being implemented include trying to discourage Oil Marketing Companies from using the forward dollar rates in pricing their products.
This according to the minister had contributed to the sustained increase in the price of petroleum products over the last one month.
He believes that all these measures would go a long way to help reduce prices of petroleum products in the coming weeks.
Removing taxes on petroleum products
A lot of industry players engaged by JoyBusiness have all maintained that there is the need for government to remove some of the taxes on petroleum products.
They argued that this is one of the surest ways to deal with the expected increase in crude prices on the economy. Already, transport fares have gone up by 10 per cent, because of the recent increases in fuel prices.
Tax build upon on petroleum products
According to the Chamber of Petroleum Consumers, these are the number of taxes on each litre of petroleum products.
Energy debt recovery levy – 41Gp
Road fund levy – 40Gp per litre
Energy Fund on a litre – 1 Ghp for
Price stabilization and Recovery Levy – 12 Gp per litre
Primary Distribution Margin – 7.5 Gp per litre
Bulk Oil Storage and Transportation – 3 Gp
Fuel marking margin – 2Gp
Special petroleum tax – 52 Gp
Unified Petroleum fund – 13.5 Gp per litre
Marketers Margin – 20 Gp
Dealers margin – 25Gp
But Deputy Minister of Energy Dr Mohamed Amin Adam has indicated that government has no immediate intention of removing taxes on petroleum products.
He said measures have already been taken to cushion consumers from the expected hikes.
He added that “If you look at the taxes on petroleum product; we have a road fund levy on it; what is it used for? This doesn’t go into the government budget for government to use; it goes straight to the road fund for purposes of maintaining our debt”.
Dr Amin further explained that all these taxes looking at what its used for it would be difficult to remove, “ We are talking about BOST margin, it’s on the price; it goes to BOST to maintain our strategic reserve.”
He said, “We’re talking about the Price Stabilization Levy, and as I already explained, that is what we are to even cushion the end-user price; the price of petroleum products on the market.”