Review taxes and levies on fuel pricing – COPEC urges gov’t
The Chamber of Petroleum Consumers (COPEC) has urged the government to review the general levies and tax elements on fuel pricing to ensure “fairly stable” fuel prices in the country.
While COPEC viewed the recent announcement of the removal of the Price stabilisation and Recovery Levy (PSRL) on three petroleum products as a good gesture, it said it was insufficient to deal with current challenges at the pumps.
“It is actually a very good gesture except that it won’t mitigate much at this point”, Executive Secretary of the Chamber, Duncan Amoah, told the Ghanaian Times in an interview on Wednesday, October 13, on the announcement on the PSRL.
The National Petroleum Authority (NPA) on Monday announced the removal of the (PSRL) on petrol, diesel, and Liquefied Petroleum Gas (LPG) for a period of two months.
The purpose of the PSRL is to stabilise prices for consumers and pay for the subsidies on Premix Fuel and Residual Fuel Oil (RFO).
The removal means that PSRL which is currently 16 pesewas per litre (GHp16/Lt) on petrol, 14 pesewas per litre (GHp14/Lt) on diesel, and 14 pesewas per kilogram (GHp14/Kg) on LPG would not be applied for the period, thereby reducing the price of the aforementioned products to cushion consumers.
A statement issued by NPA said the approval for the zero PSRL was given by President Nana Akufo-Addo to mitigate the impact of rising prices of petroleum products on the world market on consumers.
Commenting on the development, Mr Amoah said, “Fuel prices did go up by 14p/Litre in the current window and are set to go up again by another 20-30p/Litre from 16th of this month,
“Throwing in the stabilisation and Recovery Levy of 14 and 16p/Litre for diesel and petrol respectively is indeed a good gesture, but insufficient to deal with the challenges confronting us all at the pumps due to international price increments and the cedi’s depreciation for this last quarter.”
He said it would take a bit more scaling down on what he described as overbearing taxes at this point to manage fuel prices for Ghanaians this last quarter.
He said the Chamber had, in a letter dated October 5, 2021, presented its recommendations to the Ministry Of Finance for consideration in the yet to be presented 2022 budget statement.
In the letter addressed to the Ministry, the chamber said its concern was the Fuel Price Build up with respect to the deregulation policy which came into force on 16th June 2015.
It noted that although the policy had been successful at reducing or eliminating government direct control of petroleum products prices at the pump as well as ensuring healthy competition in the downstream sector, it needed some fine-tuning.
Some taxes and levies it listed for review were the PSRL; Special Petroleum Tax; Primary Distribution Margin; Energy Debt Recovery levy and the BOST Margin.
On the PSRL, for instance, it urged the government to immediately remove it to forestall the increasing spate of the price of the products and apply the already collected funds to offset or stabilise the forex and price differentials from increasing on the price build-up.
COPEC also suggested that the two-week window pricing policy should be reviewed, if possible, to at least a four-week period.