Flashback: Government playing politics with fuel prices – J.J Rawlings

Former President Jerry John Rawlings on December 12, 2008 questioned the NPP government’s prowess in reducing petroleum prices after a steep price fall of crude oil in the country.

Oil prices dropped drastically from US$ 97.37 to US$ 37.89, yet, the cost of petroleum products were high, J.J Rawlings said in a press release, citing OPEC as his source.

He indicted that the NPP government do not have the interest of Ghanaians at heart hence increasing their burdens with their ‘selfish’ actions.

Read the full story originally published on December 12, 2008 below:

Former President Rawlings has questioned the sincerity of the NPP government over the welfare of Ghanaians following its consistent failure to reduce the price of petroleum products after three months of steep price falls of crude oil.

In a statement issued in Accra on Thursday, the former President said during the past three months oil prices dropped from US$ 97.37 to US$ 37.89, a reduction of more than 60 per cent, according to OPEC sources.

This price drop has resulted in a drop of the price of fuel to consumers in most countries. South Africa, for example, announced a retail fuel price decrease of ZAR 1.61 (GHC 0.18) on 3 December 2008, after it had announced decreases in the price of retail fuel every month since August 2008 based on the falling price of crude oil. Ghana, however, has not seen one reduction in the price of fuel to consumers over the same period.

President Rawlings said research initiated by his office shows millions of dollars have been lost to Ghanaians and the Ghana economy since August 2008. He cited the example of South Africa where the price of fuel has been reduced by 50 per cent since August 2008.

The former President said National Democratic Congress Presidential candidate, Professor John Atta Mills had promised his government would reduce the price of fuel drastically because there was no justification for a delay when the average Ghanaian was suffering under extremely harsh local economic conditions.

³It is very clear and obvious that something is dramatically wrong in Ghana, and that the ruling NPP government do not have the interests of Ghanaians or Ghana in mind. A normal Ghanaian car owner spending approximately GHC 430 per month on fuel should have saved at least GHC 218 over the period, an average of GHC 44 per month. This is a scandalous state of affairs in a country where a huge percentage of the population do not even earn that much per month,² he said.

³Now that they are desperately hoping to cling onto power Ghanaians should not be surprised to wake up one early morning to hear an announcement that fuel prices have been reduced in a bid to win their vote because they think the average voter is docile and cannot think for himself. I call on every Ghanaian to carefully assimilate the data in this statement and understand the insensitivity of this government so they are not swayed by the last minute attempts at rehabilitating its dented image.²

According to the Driver and Vehicle Licensing Authority (DVLA) there are at least 100,000 registered vehicles on Ghana¹s roads. At an average unnecessary cost of GHC 44 per month, Ghanaians have been deprived of more than US$ 22 million over the period that could have been used to counter the effect that increased fuel prices had on food and other necessities. President Rawlings continued to say that he does not even want to think where this amount would end if commerce and industry is included in the calculation.

According to a study from AIRNIC in June 2008, a research firm that tracks cost of living data, the difference between fuel prices in the USA and Ghana is staggering. As of early May, US petrol prices averaged US$3.55 a gallon. That compares to over $5.50 a gallon in Ghana. Former President Rawlings explained that this not only indicates a deliberate overcharging on fuel prices by the NPP government, but also on a total ignorance by the Government to follow policies and practices with regards to fuel pricing that is commonly accepted in the world. This mismanagement of the economy by the NPP government led to huge losses in excess of US$ 162 million made by TOR when they did not increase fuel prices in line with world market prices. Their refusal to decrease already inflated prices since August when world market prices dropped has now impoverished Ghanaians further.

³The situation Ghanaians are facing with regards to the fuel pricing policy of the ruling NPP government is the tip of the proverbial iceberg of a government who cares only about their personal enrichment, and nothing about the well being of the Ghanaian people. The results in the recent elections is a clear indication that Ghanaians have woken up to a deliberate strategy by the NPP government to increase the poverty of the man in the street while enriching the rulers,² Former President Rawlings said.

Former President Rawlings said the current economic situation in Ghana caused by eight years of mismanagement of our resources can only be reversed with a government that understand the meaning of equity and prosperity for all its citizens. The message by Professor Mills and the NDC has been consistent and is not a creation for the second round.

³Fishermen require fuel subsidies to support their business particularly a time when the government has allowed pair trawling to deplete our fishery resources and the NDC government is committed to identifying the best ways of ensuring that that particularly industry is revived for the ordinary fisher folk to earn a living,² the former President said.

³We ask all Ghanaians to open their ears and eyes to the mismanagement of our beloved Ghana, the country and her people, by the NPP government to the detriment and destruction of both. On 28 December 2008 we have the chance to take charge and to remove the NPP from their seat of mismanagement. Let us take hands and join in this worthy cause. President Rawlings said.

Exhibit ­Crude Oil price changes 2008

12/09/2008 97.37

19/09/2008 89.2

26/09/2008 98.28

03/10/2008 90.01

10/10/2008 77.98

17/10/2008 67.88

24/10/2008 61.53

31/10/2008 57.64

07/11/2008 56.83

14/11/2008 50.75

21/11/2008 45.4

28/11/2008 46.03

05/12/2008 40.77

12/12/2008 37.89

Source: http://www.opec.org/home/basket.aspx

Exhibit ­ Fuel price changes in South Africa 2008 Source: http://www.dme.gov.za/energy/December/IBLC%202004%20-Basic%20Fuel%20Prices%2 0December%202008.htm