Road contractors want gov’t to increase fuel levy

The Association of Road Contractors Ghana (ASROC) has urged the Government to increase the levy on petroleum products to financially strengthen the Ghana Road Fund.

The Ghana Road Fund is meant to fund road maintenance in the country, and its major source of funding is the levy on petroleum products, mainly petrol and diesel, which accounts for about 75% of total revenue into the fund.

In a press release issued by ASROC, signed by Kwaku A Nuamah, Executive Director, ASROC and copied to the Ghana News Agency, it said that the local construction industry had continued to grapple with several challenges including the Government’s inability to pay workers on time.

"One of the key causes of the problem is said to be Government’s inability to review the fuel levy components of the petroleum products pricing to make available the Ghana Road Fund adequate resources to discharge its duties," it said.

The fund was set up with the support of the World Bank with the ultimate target of the levy being pegged at the equivalent of 9.5 U.S Cents, which was to be achieved before the year 2000, it said.

In 2005, the levy on petrol and diesel for the fund was increased from four Ghana Pesewas per litre to six Ghana Pesewas, which was equivalent to 7.5 U.S Cents.

Unfortunately, the Association said, the continuous depreciation of the Cedi and the failure of past and present Government’s to implement gradual but steady adjustments of the levy had reduced the six Ghana Pesewas value to nearly two U.S Cents from 7.5 U.S Cents.

“The implication of this development is that the volume of maintenance works that the fund can support has reduced by a margin over two-thirds over the years with the total kilometres of road network, which currently needs to be maintained at over 68,000km,” it said.

The Association said, “In our opinion, the continuous downward trend of crude oil prices on the world market presents an opportunity for Government to address this critical problem. Government’s decision to take advantage of the windfall to resolve its indebtedness to the bulk oil distributors and the recent hint of the possible setting up of a stabilization fund are laudable’’.

“The Association believes that, Government should take a bold step and adjust the levy upwards especially, in view of the windfall occasioned by the continuing downward trend of crude oil prices to the Road Fund since a financially strong Road Fund will work to benefit the whole population”.