Cedi depreciation cause of fuel price increment - IFS

Acting Executive Director of the Institute of Fiscal Studies, Said Boakye, has stated that the depreciation of the local currency was one of the factors that led to the increment in petroleum products.

He, therefore, called on government to desist from adjusting fuel levies in a bid to salvage the high inflation rate in the country.

Speaking at a press conference in Accra, he said the increment in fuel prices will compound the hardship on Ghanaians.

Said Boakye while addressing the press said, "The government should not adopt the programme suggestion to adjust fuel levies in line with inflation and exchange rate changes to raise more revenue. It should first be recognized that fuel price changes have powerful effect both directly and indirectly on inflation in Ghana. Therefore adjusting fuel levies in line with inflation is bound to raise fuel prices also in line with inflation."

"Since exchange rate depreciation also causes fuel and other prices to rise, leading to inflation, adjusting fuel levies in line with currency depreciation will further risk fuel prices, generating more inflation. This will be too high macroeconomic price to pay in a bid to increase revenue," he stated.

Meanwhile, the Chamber of Petroleum Consumers (COPEC) has predicted a marginal increment in fuel prices in this pricing window - June.

According to the Executive Secretary of COPEC, Duncan Amoah, petrol and diesel prices are expected to see an increment between 2% and 5% compared to the current prices at the pump.

He stated that the increase in petroleum products due to the depreciation of the Cedi against the major trading currencies.

He, however, noted that Liquefied Petroleum Gas (LPG) prices remain unchanged.



ESA/FNOQ