Business News of Thursday, 20 September 2018
The Minority National Democratic Congress [NDC] in parliament, will from October 2018, roll out a national outreach program to engage Ghanaians on their position on the recent fuel price hikes.
This according to them, is an attempt to explain the issues plainly to the citizenry, and further press home their demand for the scrapping of the special petroleum tax.
The Special Petroleum Tax initially 17.5%, was placed on petroleum products by the erstwhile Mahama administration in 2015.
Though the current government had criticized its introduction when it was in opposition, it only reviewed it downwards by 2.5 percent in the 2017 budget.
Fuel prices have hit the 5 cedi mark with diesel going for GHc5.18 pesewas per litre, and petrol Ghc5.14 per litre.
But Adam Mutawakilu, Minority Spokesperson on Mines and Energy, believes scrapping of that tax alone can reduce the price of fuel at the pumps by at least 2 cedis per gallon, hence the outreach.
“We in the minority…15th October will be going on an outreach program to the various regions to meet various stakeholders to prove to them the reason why we are calling for the specialized petroleum tax to be taken off.”
He further argued that, data available from 2015 indicates that the special petroleum tax has outlived its usefulness and must therefore be abolished to bring relief to Ghanaians.
“We will bring statistics in 2015 to prove why it was introduced and why it should be removed now. We will go to the various districts to educate them to know the reason why we are calling for the special petroleum tax to be removed.”
According to the Adam Mutawakilu, the tax has outlived its usefulness at a time when world market prices allow government to make a windfall of 10 million dollars per day from crude exports.
The Damongo Member of Parliament said government must not be insensitive to the plight of Ghanaians.
“In the 2018 budget, this [Akufo-Addo] government presented to Parliament a benchmark price [the price at which we sell our oil] of $57 per barrel. But as we speak now, the price per barrel is $77 per barrel. That means government is making surplus of $20 per barrel. And currently we produce at almost 200,000 barrels. So if you multiply this $20 barrel excess by 200,000 we are talking about $10 million surplus every day.”
“That means every day government is making surplus of $10 million. By this, the special petroleum tax has nowhere to fill in the gaps in respect to the oil prices. And that is why we are calling on President Nana Akufo-Addo to as a matter of urgency scrap the special petroleum tax. Currently, it’s about 46 pesewas per litre, and if it’s about 5 litres a gallon, you are talking about Ghc2.2. If you calculate it as a percentage that’s about 10%,” he added.
Expect more fuel price increases over Cedi woes – Energy Institute
The Executive Director of the Institute of Energy Security (IES), Paa Kwesi Anamoah Sakyi, has warned that fuel prices at the pump will continue to go up until the cedi stabilizes.
According to him, Bulk Oil Distributors who buy crude oil have no option but to pass on the increasing cost of fuel to Ghanaians as prices on the world market.
“When there is a change, or the dollar is stronger than the cedis, then it means that you need more cedis to source for your products. In the last two weeks or more, the dollar was just around 4.7, but it has moved to 4.95; a depreciation of 4%.”
ACEP backs calls for removal of some fuel taxes
Energy Think Tank, Africa Centre for Energy Policy (ACEP), has backed calls for the government to bring relief to fuel consumers by scrapping some taxes from the petroleum price build up.
Speaking on Citi Eyewitness News, Executive Director for ACEP, Ben Boakye, indicated that government must consider its options carefully as fuel prices rise.
“There will be the need for government to pass on relief to consumers. I don’t know to what extent…but scrapping of some taxes should be considered as well,” he added.