Fuel taxes must be suspended – CUTS Ghana

CUTS Ghana, a local non-governmental organisation has asked the government to suspend the special taxes on petroleum prices in the wake of the power crisis to help corporate entities to stay in business.

“At a time when most businesses have to rely on diesel or petrol-run generators, suspending the special taxes would help businesses to stay in business.”

A statement issued in Accra by Mr Appiah Kusi Adomako, Country Coordinator for CUTS Ghana, indicated that it is far better for government to shed the tax than to allow industries and businesses to suffer liquidity crisis.

Mr Adomako noted that consumers of petroleum products have been taken aback by the National Petroleum Authority (NPA) decision to increase petroleum prices by about nine per cent on average, which took effect from May 17, at a time when Ghanaians least expected an upward surge in the price.

The statement said it is regrettable that Ghanaians are paying more for petroleum products at a time the country is a net importer of crude oil which makes the situation of the citizenry a paradox.

“There is an overreliance by the government on petroleum revenue, hence, Ghanaians suffer more when the prices of the crude go down on the world market and government is unable to meet its projected revenue targets.

“Meanwhile, when world market prices surge, the government and its agencies are quick to pass on the increase to the pump prices. The unreasonable expectation from petroleum receipts should be managed to some extent,” the statement said.

CUTS Ghana also asked the NPA to be transparent with the automatic adjustment formula and government should check the activities of the bulk distribution companies to bring about competition in the industry.

“The duty of every government is to achieve strong economic fundamentals and not to turn around and justify price increase as result of failing economic fundamentals. If the economic fundamentals were to be right, a gallon of petrol could be sold at less than GH?5.00.”

CUTS Ghana is a policy think tank working in the area of trade and development, consumer protection and awareness, economic regulation and investment, competition policy and law.