Ghana Government To Reduce Fuel Price In Last Quarter 2016

An Economic and Financial Journalist, Mr. Adu Koranteng has indicated that government is likely to reduce the price of petroleum products by about 10% in the last quarter of 2016 to bring relief to Ghanaians on the face of the harsh economic difficulties they are facing.

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The Journalists who works with the New Crusading Guide Newspaper as the Business Editor noted that government has been under intense pressure from the public and civil society organizations to reduce fuel prices as the world market price for crude oil and petroleum products continue to reduce.

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Fuel
Besides, the decision is being considered to reduce the plight of the people and increase the chances of the government of the National Democratic Congress in the run up to the December 7 presidential and parliamentary elections.

a survey conducted reveals that the popularity of the government has severely diminished among the population with the main reasons being the abnormal increase in petroleum prices on the domestic market when the world market price is reducing. And the abrogation of the Nursing and teacher trainee allowances. However, since the nursing training allowances has been restored with that of the teacher trainees being considered, it is likely the Energy sector levy will to reduce by 10% to bring relief to Ghanaians.

Mr Adu Koranteng noted that it does not make sense for a gallon of petrol or diesel to be sold at GHC15 (US$4) or more when a barrel of crude oil is sold at US$45 dollars on the international market.
“The popularity of the government is diminishing at a fast rate due to the introduction of some of these policies and efforts are being made to manage them. Its better late than never. However as to whether these decisions can help surge the popularity of the government in the run up to the December 7 general elections, I cannot tell,” he stated.

It will be recalled that Government through a certificate of urgency passed the new Energy Sector Levies Act (Act 899) in December 2015, which took effect from 4th January 2016. However economic experts have indicated that over-reliance on petroleum taxes and levies could adversely affect the economy in many ways such as inflation, growth deceleration, social development challenges, etc.

The TOR Debt Recovery Levy and the BOST margin have been maintained in spite of the opposition to it. In addition, new levies have been introduced, which in effect, have significantly neutralized the effect of the abolished exploration levy. These include – the Power Generation & Infrastructure Support Levy and the Forex under-recoveries Levy. Also, the rates of some existing levies have been increased to astronomical levels; for example, the road fund levy, which has been increased by 433%. The cross subsidy levy has also been re-packaged into the Price Stabilization and Recovery Levy, but now limits cross subsidies to only premix and residual fuel oil.

It is obvious that consumers have over paid the TOR debt. At the time the levy was instituted, the total debt stood at GHC450 million. By 2009 the total debt had grown to GHC900 million due to non-application of the revenues to service the debt as well as interest accumulation. Analysis shows that between 2009 and 2015, the total collection from the levy is in excess of GHC1.9billion. This effectively amortises the debt assuming an interest rate of 10%. It is therefore difficult to comprehend why consumers should continue to pay this debt. Ostensibly, the TOR Debt Recovery Levy has over the years been misapplied, aided by the weak oversight of parliament. Section 13 of the TOR Debt Recovery Fund Levy Act 2003 (Act 642) states;

Source: News Ghana

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