Ghana's economy cannot support fuel subsidies – Osafo-Maafo

Fuel Pump112121112121 File photo a fuel pump

Thu, 26 May 2022 Source: www.ghanaweb.com

Fuel prices hike significantly since the start of 2022

April inflation hits 23.6%

Government to miss out on GH¢4bn revenue if petroleum taxes are removed, Akufo-Addo

Senior Presidential Advisor, Yaw Osafo-Maafo, has corroborated government’s stance that it will not be able to provide fuel subsidies on petroleum products.

Since the start of the year, prices of fuel have hiked significantly with many consumers and stakeholders calling for a reduction in fuel taxes.

Speaking in an interview with Accra-based Asaase Radio, Yaw Osafo-Maafo said the current structure of Ghana’s economy cannot support any form of fuel subsidies.

“There is no way the economy can provide subsidy to fuel. it’s a commodity we don’t produce, others produce and we buy. And therefore, we should at best buy it at the cost price,” he is quoted to have said by asaaseradio.com

“The economy cannot and I repeat, cannot stomach [fuel] subsidy. People should pay for it. You see, there are so many vehicles on the road and some of them need not be there. If you can’t afford to drive a 4-wheel drive, then you must not use it. We must now begin to look at situations of economic use of energy,” Mr Osafo-Maafo explained.

Meanwhile, President Nana Addo Dankwa Akufo-Addo had earlier argued that the removal of taxes on petroleum products will rather result in government missing out on some GH¢4 billion cedis in revenue.

“At this time, when we are determined to expand Government revenues in order to increase our capacity to finance our own development, can we afford to reduce tax revenues by four billion cedis?” he said while speaking at this year's May Day celebrations at the Black Star Square.

He added that the government was currently faced with very tight fiscal and financing conditions, and revenue generation constraints, hence, removing taxes on petroleum taxes will worsen the current conditions.

“Indeed, some of the revenues from these same taxes on petroleum products are what is used to pay some of the salaries of the seven hundred thousand public sector workers on government’s payroll,” the president argued.

Source: www.ghanaweb.com
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