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GPRTU to announce a 30% transport fare increment by May 13

Source The Ghana Report

Commuters should brace themselves for another transport fare increment as the Ghana Private Road Transport Union (GPRTU) prepares to release new fares within a week.

Barring any last-minute intervention, the hikes expected to be announced on 13 May 2022 will be the second time transport fares have increased in less than three months.

The GPRTU said the high cost of operations had compelled them to take drastic decisions following the government’s failure to cushion Ghanaians.

The drivers have been pushing for fare increments for several months due to the rising cost of fuel and other products.

They also cited high import duty on vehicles and an increase in the cost of spare parts and vehicle lubricants as part of the numerous reasons.

The GPRTU pointed out that numerous taxes have ballooned fuel prices at the pumps, but the government was unwilling to address the situation.

A similar situation compelled drivers to embark on a one-day nationwide strike in December 2021.

However, they returned to work after negotiations with the government and assurances of a solution to the problem.

Currently, oil price has increased to a little over $111 per barrel on the international market.

The situation has been compounded by the depreciation of the Ghana Cedi against other major currencies.

As of 2 May 2022, the average fuel price in Ghana was GHC 10.05.

The price slightly dropped from four weeks before after the government announced a 15 pesewas per litre reduction on the product for three months.

Since 3 January 2022, the fuel price in Ghana has increased by approximately 45.7 per cent.

The last review was a 15% increment on 26 February 2022. 

“We have been forced to make a decision. We were thinking of being sympathetic. We never wanted to take this decision, but the government has not cooperated with us. Fuel prices keep shooting up, we wrote to the Transport Minister about our plans to increase transport fares, but we received no feedback. We are thus going to make a decision that will help us as well.”

“We will announce the new prices by next Friday,” Industrial Relations Officer for GPRTU, Abass Imoro, told Citi FM.

The decision comes less than a week after President Nana Addo Dankwa Akufo-Addo said that reducing taxes on petroleum products would not be in the nation’s interest.

He said the suggestion was not sustainable because “removing taxes on petroleum products will reduce Government revenues by some four billion cedis (GHc4 billion).”

Addressing organised labour at this year’s May Day celebration at the Independence Square in Accra, the President said, “At this time, when we are determined to expand Government revenues to increase our capacity to finance our own development, can we afford to reduce tax revenues by four billion cedis (GH¢4 billion)?

The GPRTU, the Trades Union Congress (TUC), the Minority in Parliament, and some energy experts have proposed removing the taxes slapped on the product.

What can be done to address the situation?

Despite the country producing oil in large quantities, the lack of refineries has prevented the country from enjoying lower prices of finished products.

As of September 2020, crude oil production capacity in Ghana was 196,000 barrels per day.

However, Ghanaians continue to buy fuel at exorbitant prices due to importation and taxes slapped on the commodity.

The Ranking Member on Parliament’s Energy Committee, John Abdulai Jinapor, has entreated the government to revamp the Tema Oil Refinery (TOR) to process Ghana’s crude to meet local demands instead of relying on the importation of refined oil.

Additionally, he suggested that the Bulk Oil Storage and Transportation Company Limited (BOST) should hold strategic reserves which could be used to ease supply challenges whenever necessary.

According to him, revenues from fuel levies should be enough to defray some of the cost to cushion consumers from bearing the brunt of high prices.

Mr Jinapor is not the only person to make such proposals to the government to address rising fuel prices.

COPEC-Ghana Executive Secretary, Duncan Amoah, had 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 failure of BOST 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”.

Furthermore, Mr Amoah wants the government to scrap taxes that add up to the fuel cost on the market.

This is because there are about 12 different taxes and levies on petroleum products, which adds up to almost 40% of the fuel price.

These taxes include the Energy Debt Recovery Levy, Road Fund Levy, Energy Fund Levy, Price Stabilisation and Recovery Levy, Sanitation and Pollution Levy, Energy Sector Recovery Levy,  Special Petroleum Tax and Primary Distribution Margin, BOST Margin, Fuel Marking Margin, Marketers’ Margin and Dealers (Retailers/Operators) Margin.

 

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