Business News of 2014-08-12

Depreciating cedi impacts imported petroleum products

The Director of Research for the African Centre for Energy Policy (ACEP), Mr John Peter Amewu, has stated that the depreciating cedi is impacting on the prices of imported petroleum products.
He said the petroleum prices on the international market had remained stable for some time now and noted that under normal circumstances, the prices of the products should have remained stable even at the last price review.
Mr Amewu said this at a meeting organised by the Canadian Chamber of Commerce in Accra. According to him, the huge budget deficits, attributed to the payment of subsidies on petroleum products, may not be entirely correct, adding that the challenges may be a direct result of the mismanagement of the economy.
The government spent 1.158.1 billion on subsidies in the year 2013 and the Minister of Finance, Mr Seth Terkper, recently announced at the mid-year review of the 2014 budget that the provision made for subsidies in the 2014 budget had been revised upwards from GH¢50.0 million to GH¢618.8 million.
Mr Amewu said all of this could have been prevented through monitoring and fiscal planning of the economy.
“If the economy is managed prudently, fuel prices will be reduced,” he said.
Mr Amewu also backed calls for the government to completely scrap subsidies because he believed the subsidies were not reaching the targeted people.
He said the government should rather direct the subsidies into the health and transport sectors.
“Monies going into the subsidies should rather be directed at providing mass transportation and also broaden the Livelihood Empowerment Against Poverty (LEAP) base to channel cash directly to them,” he said.
Mr Amewu also called on the government to minimise its involvement in the operations of the NPA, as according to him, the persistent involvement of the government is the cause of the problems.
“NPA is a regulator but it’s not independent because politicians are playing the game,” he added.
The Head of Pricing, Planning and Research for the National Petroleum Authority, Mrs Alpha Welbeck, also asked government to make sure that the subsidies were fully budgeted for.
“If government wants to subsidise petroleum products, then we should make sure it is fully catered for in the budget so that it will be paid on time,” she said.
Source: graphic.com
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