Chief Policy Analyst at the Ghana Institute of Public Policy Options, Dr. Charles Wereko Brobby, believes government will be on course in moderating the rocketing price of fuel should it leverage on the country’s windfall profits from oil revenue.
For him, the global factors affecting brent crude oil prices will always be unfavourable hence applying the windfall profits is Ghana’s best option to cushion fuel consumers.
Speaking on the Point of View on Monday, the former Chief Executive Officer for the Volta River Authority (VRA) demanded action from the government to mitigate the impact of the high cost of fuel on Ghanaians.
“When crude prices fall below the brent price, it means that we are making revenue. Because we have declared that we are a net exporter of oil, when bench prices go up, we get windfall profits because we are getting revenue over and above the brent mark price. So there is something we can do with that money, because it is windfall profit and we do not consider it part of our streams of revenues for the year. That money can be used to calculate the ex-refinery price to reduce the price at the pump.”
“That for me is the leeway government can use to either keep prices stable or below for what they have been for the past years. I do not expect crude prices to come down, so unless the government starts applying the windfall profit to reduce ex-pump prices, we are in for a bad time for fuel prices. The GH¢8 mark for fuel prices will happen within the next month because I do not expect crude prices to come down”, he said.
Prices of fuel have gone up at the pumps across the country because the Price Stabilization and Energy Recovery levy, which is a key component of the fuel price build-up, has been restored by the National Petroleum Authority (NPA) after it was suspended for about three months.
The levy was suspended last year as a means of reducing the burden on consumers.
Fuel prices to hit GH¢8 per liter soon; adopt dual pricing method – COPEC
The Chamber of Petroleum Consumers Ghana (COPEC) has asked the government to adopt measures aimed at cushioning Ghanaians against the astronomical increase in petroleum prices.
COPEC is also predicting that the price per litre of the product will hit GH¢8 by March 2022.
Executive Secretary of COPEC, Duncan Amoah, lamented that government is doing too little to bring down the prices of fuel and must immediately devise means to address the incessant increments.
“In real terms, fuel price increasing these days happens to be one of the very things pushing the economy to the brink. The year began with fuel price at GH¢6.6. Unfortunately, we now have some OMCs selling at GH¢7.50. It’s our estimation that probably by the end of March, if international price trends continue to move as it is doing currently, we would be crossing the GH¢8 mark.”
Already, COPEC has called for the withdrawal of the levy and has now urged the government to adopt the dual pricing module to stabilise fuel prices and the accompanying economic difficulties.
“Our expectation as a chamber is that, authorities should be looking for ways to bring down fuel prices. One could bring the dual pricing method where anytime international market prices go up, they ease down on the taxes and anytime international prices decline, they can [apply] the full extent of the taxes because fuel prices going up on the world market is of greater benefit to Ghana than we are currently making it to be.”
“So as you can see, we have crossed the GH¢7 mark, it’s quite certain that by the second window of February which will commence in about 12 days, prices will go up again”, Duncan Amoah added.