The government is taking measures to discuss possible interventions to cushion consumers against high fuel prices.
Consequently, suggestions have been laid before Cabinet for subsidies, but a firm decision is yet to be taken on the matter.
This comes on the back of skyrocketing prices of petroleum products in the country, which could have a ripple effect on the prices of goods and services in the coming days.
The Russian-Ukraine conflict has affected supplies, raising the cost of crude oil beyond $110 per barrel on the international market, but the depreciation of the Ghana Cedi and numerous levies have compounded the rising cost.
On Tuesday, 1 March 2022, fuel prices crossed the GHS8-per litre mark at some selected pumps across the country, with industry analysts suggesting that it could hit GH9-per litre by the end of March.
This is happening less than a week after commercial vehicle operators increased transport fares by 15%.
Deputy Minister for Energy, Andrew Agyapa Mercer, explained that an intervention would still cost taxpayers, but the government is considering several options available.
“It’s unfortunate, and we as a government have taken inputs from the NPA [National Petroleum Authority] as an agent of the ministry to forward to the Ministry of Finance to take a look at, and subsequently submit to the Cabinet for some direction on what further relieves – if any that government could introduce to cushion Ghanaians.”
He was concerned that “the price has gone up beyond the reach of many Ghanaians”, which requires some action from authorities.
“We ought to begin the conversation as to whether we as a nation have to set a ceiling beyond which the deregulation is suspended for government intervention to be introduced. That’s a conversation we should have because whatever subsidy from the government will have to be paid for”, he said.
He said stakeholders were still deliberating on the matter “so NPA will come out with the best decision that will be in the interest of all”.
He was speaking in an interview with Joy FM.
What can be done to address the situation?
The Executive Secretary of the Chamber of Petroleum Consumers (COPEC), Duncan Amoah, told The Ghana Report, “We have a local refinery that we could have leveraged to get some fuel security at lower prices, but unfortunately, we don’t think there is a political will to refurbish the Tema Oil Refinery”.
Mr Amoah observed a fully functional refinery would cut the logistical cost, which adds to the price build-up by exporting crude to Europe to be refined before importing back to Ghana.
“They need to get TOR back on stream, and the need for political interference to be stopped holds the key for all for us,” he underscored.
Additionally, he cited the Bulk Oil Storage and Transportation Company Limited (BOST) failure in executing its mandate.
Mr Amoah explained that BOST is supposed to store huge volumes of fuel and release to the market to level prices and check shortages “without overstretching the already burdened Ghanaian taxpayer”.
However, “we do not see that function of BOST, and they are now focusing on trading…which was not the purpose of the BOST Act but to hold strategic stock”.