Calls for review of petroleum pricing formula

Accra, Nov. 27, GNA - The Private Enterprise Foundation (PEF), the umbrella body of private sector operators, has waded into the debate of petroleum pricing, calling on government to review the automatic price adjustment formula for petroleum products in order to save industries from collapse.

At a roundtable on the 2008 Budget, PEF said the impact of the increasing oil prices on the operational cost of business entities could not be taken for granted. In line with the deregulation of the petroleum sector, fuel prices are automatically adjusted by the oil marketing companies taking into cognisance prevailing world market prices.

Mr. Felix Tettey-Fio, a consultant, who presented PEF's recommendations, told the Ghana News Agency that apart from utilities, transportation constituted a major cost component in the operations of most industries.

According to him, government's response to the pricing issue would go a long way to prevent the harm that the automatic price adjustment could cause to industry.

In another development, PEF acknowledged the recent increases in access to credit by the private sector but asked the Ministry of Finance and the Bank of Ghana to intensify work to give legal effect to the operations of the Credit Reference Bureaux. Besides, government must also address the house numbering system proposed in the 2007 Budget to help identification to help lower the cost of credit.

Mr Tettey-Fio said the private sector must be encouraged to access the equity market as a source of long-term stable and reasonably priced capital to undertake the necessary retooling and capitalization. He said the various funds set up by government to provide assistance to small and medium scale enterprises to finance their operations were not making the desired impact. He called on government to institute an immediate investigation into the management and cost of administering the various funds such as Export Development Investment Fund, Venture Fund and Micro and Small Loan Centre (MASLOC).

Mr Anthony Sikpa, Vice-President of PEF Governing Council, said the petroleum pricing issue should be managed well so as not to spell doom for industry.

Participants at the roundtable lauded government for its policy initiative on agriculture but said more needed to be done to enhance the performance of the sector.