The increment in the price of petroleum products would have been understandable at a time when economic hardship has been managed.
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The Founding President and CEO for IMANI Ghana, Franklin Cudjoe has argued that, there cannot be a reasonable justification for a price hike in petroleum products. Not now at least when every economic leaf has been squeezed of all its nutrients.
“I have seen that the Ghanaian currency, the cedi has deeply depreciated against the major currencies again and some say it has impacted the current price hike on petroleum products. If as suggested, this 9% price hike is to offset further depreciation of the cedi against major currencies, the answer lies in better economic management, not wanton panicky measures.
I have also learnt of a 1 percentage point increase in the Bank of Ghana policy rate from 21% to 22% on May 13, a week after the government, through the Ministry of Trade, Bank of Ghana and all major civil society heads and banking professionals lamented over the high cost of credit in Ghana in a big conference. I was invited to be a panelist, but I declined as I knew it would have been a total waste of my time. I was justified. Good morning.”
Is Ghana government bowing to International Monetary Fund (IMF) conditions and as a result increase fuel prices? This is the question some Ghanaians are asking.
According to an article published on local Joy FM website on 18 May 2015, the cedis’ depreciation, rising prices of finished products and crude oil has caused the National Petroleum Authority to increase fuel prices.
The value of every litre of Petrol, Kerosene, Diesel and a kilogram of LPG on Sunday May 17 went up by 9 percent.
This means that a gallon of Petrol will this morning be selling at 16 Ghana cedis 65 pesewas, while Diesel will also go for 16 cedis 20 pesewas.
Head of Public Relations at the Authority, Yaro Kasambata told Joy Business because they are trying to recover the full price of every product sold, they were compelled to pass on the cost to consumers.
“These increases as we see are full time recovery because we don’t want to incur any loses or any under-recoveries again…you also know that the cedi has seen some depreciation in the period under review. And these three factors all uniting, is what has caused the price to increase to 9 percent.”
A statement from the Chief Executive of National Petroleum Authority, Mr. Moses Asaga also explained the increment has become necessary to forestall shortages of the products at the fuel stations.
“The increment is the direct result of increases in the world market price of the various commodities. Between February 2015 and now, there has been a 37% change in the price of Petrol, 26% in diesel and 43% in LPG.
“This had led to an increasing rate of unpaid under recoveries or subsidies, amounting to about GH¢146 million, which is causing serious liquidity challenges for the Bulk Oil Distribution Companies (BDCs). If not checked, this can lead to fuel shortages at the pumps and its attendant effects on productivity.”
The statement said the NPA is working with relevant agencies and partners to fully deregulate the oil marketing business and ensure that there is cost recovery on petroleum products.
When fully deregulated, Oil Marketing Companies will fix their own prices and compete for consumers based on their prices.
Meanwhile, the various transport unions in the country have directed their members not to increase transport fares until next month for the midyear review of transport fares.
Currently, crude is going for $53.80 per barrel.