Fuel prices to reduce as govt suspends levies
Fuel prices are likely to reduce at various pumps as the government has approved the removal of the Price Stabilisation and Recovery Levy (PSRL) on petrol, diesel and liquefied petroleum gas (LPG) for two months.
The PSRL was introduced into the downstream petroleum sector to stabilise prices for consumers and pay for Premix Fuel and Residual Fuel Oil (RFO) subsidies.
It was used as a buffer for under-recoveries in the petroleum sector, stabilise petroleum prices for consumers, and subsidise premix and residual fuel oil, but the Chamber of Petroleum Consumers-Ghana (COPEC) called on the government to abolish the levies.
COPEC also highlighted the need for authorities to apply the already collected funds to offset or stabilise the forex and price differentials from increasing the price build-up.
Commenting on the removal of the levy, the National Petroleum Authority (NPA), who made the recommendation to the government, said the move would provide relief to consumers of petroleum products.
“At this time, it is important that the PSRL which is currently 16 pesewas per litre on petrol, fourteen pesewas per litre (GHp14/Lt) on diesel, and 14 pesewas per kilogram on LPG are zeroed to cushion consumers,” the NPA stated on Monday, October 11.
“Because the pricing of petroleum products in Ghana is deregulated, changes in prices of petroleum products on the world market have a direct impact on prices at the pumps”.
The NPA has since expressed its gratitude to President Nana Akufo-Addo for granting the request to remove the levies and pledged to work with the Ministries of Energy and Finance to quicken the legislative processes to give immediate effect to the directive.
Beyond the removal of price stabilisation and recovery levies
Prices of crude oil and refined petroleum products have seen sharp increases on the world market due to a rise in demand for oil globally, without a corresponding increase in supply, particularly from the Organisation of Petroleum Exporting Countries (OPEC) and its allies.
Meanwhile, COPEC has indicated that the country’s local refinery could be leveraged to get some fuel security at lower prices by having the political will to refurbish the Tema Oil Refinery (TOR).
The Executive Secretary of COPEC, Mr Duncan Amoah, has observed that 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.
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 to check shortages “without overstretching the already burdened Ghanaian taxpayer.”