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Statement By Prof. Mills On Petroleum Price Increases

Sat, 25 Jan 2003 Source:  

The flagbearer of the opposition NDC, Prof. John Evans Atta- Mills says the new petroleum prices announced by the NPP Government last Friday January 17 203, have come to all Ghanaians as a shock and a surprise.

Full text

Whilst we had all been primed to expect some increases, the scale and extent of those increases were never anticipated by anyone. The IMF in its Aide Memoire to the Government of September 30, 2002, called for only a 30% increase in the ex-refinery prices to reach import parity levels, implying an ex-pump price increase of only 25%. We are all at a loss therefore as to where the almost 100% increases are coming from.

When the NDC was in office, we used to agonise over the issue of petroleum price increases. We were always worried about the amount of increases that the ordinary Ghanaian could bear and we developed policies that ensured that petroleum prices were affordable.

It is unfortunate that the TOR debt, a portion of which accumulated during the period of the NDC, has become the NPP Government’s convenient excuse to pad the prices of petroleum products. The NDC always had a plan to amortise that debt and we would gladly have discussed our intentions and proposals with the NPP if only they had decided to speak to us.

Our hearts go out to the people of Ghana who have to bear the pain that go with the level of the announced increases, a part of which was clearly avoidable.

We recollect for example that in finally announcing the cancellation of the IFC loan last year, the Minister of Finance served notice that the loss of that facility would entail a recourse to domestic resource mobilisation. That has now manifested itself in the new petroleum prices.

We are also aware that within the announced prices are taxes and other revenue raising measures that can be adjusted in such a way as to bring the prices down and make them a little more affordable for the ordinary Ghanaian.

The announced price increases show little or no regard for the poor, the vulnerable and the disadvantaged in our society who are entitled to the constitutional protection of the state.

The new price of kerosene, for example, shows scant regard for the plight of the rural dweller. The new price of pre-mix fuel seems almost designed to ensure the destruction of the fishing industry, negating all the work of our hard working scientists in developing a product specifically tailored to meet the needs of that industry only. The new price of LPG is an unfortunate signal to people to go back to the charcoal days, thus jeopardizing our efforts at afforestation and reforestation.

When the NDC was faced with a similar situation in 1995 with regard to the then newly introduced VAT, it rolled back, suspended implementation, went back to the drawing board, and came back with a repackaged and more acceptable VAT, with a lower rate and a higher threshold.

It is in that same context that we call on the NPP Government to roll back on the announced price increases before it is too late. The Government met with the religious bodies, sections of the student body and selected journalists on the price increases. It is important for the NPP Government to also urgently sit down with the leadership of the other political parties and social partners to review the situation and agree on realistic but affordable prices for petroleum products that will not allow the petroleum prices to choke the very life out of the ordinary Ghanaian.

The looming economic chaos and political tension arising out of the petroleum price increases calls for such a meeting, for there is no way that the new prices can be sustained. The NPP Government should not wait for public manifestation of discontent before it does what is economically prudent, socially equitable, and politically acceptable.

The NDC will continue to monitor events as they unfold on the petroleum price front and react as we consider appropriate.

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