Study suggests pre-mix fuel subsidy removal will improve sector

The issue of premix fuel subsidy has reared its head again, with a recent study by the Environment and Natural Resource Research Initiative (ENRRI – EfD Ghana) revealing that 91 percent of fishers in the country support removing the long-standing premix fuel subsidy.

This is despite the policy’s original intent to make fuel more affordable for artisanal fishers.

Of the nine percent who voted against removal of the subsidy policy, more than one-half (52 percent) agreed that the proposed policy’s reason to remove the subsidy is good.

Many of the fishers now argue that the subsidy is ineffective and are concerned with irregular distribution of the fuel provided. According to preliminary findings from the study, fishers only receive subsidised fuel for about four months each year – leading to significant challenges in planning and sustaining their livelihoods.

Irregular supply of subsidised fuel has led to suspicions of mismanagement, with some fishers reporting that the fuel they do receive is often damaged or of poor quality… which negatively impacts their equipment.

Combined with over capacitation of the sector – which currently has more than 12,000 canoes in operation, exceeding the sustainable range of 8,000 to 9,000 – this has left many feeling that the subsidy does more harm than good.

Director of ENRRI/EfD-Ghana, Professor Wisdom Akpalu, argues that the premix fuel subsidy is exacerbating the overfishing crisis. While the subsidy was intended to reduce operational costs, it has instead encouraged more canoes to enter the sector – leading to overfishing and environmental degradation.

“The system is encouraging overfishing rather than boosting productivity, contributing to the decline of our marine resources,” he noted during a conference dubbed ‘Is Premix Fuel Subsidy in Ghana’s Artisanal Fishery Desirable? Preliminary Results at the Institute of Statistical Social and Economic Research (ISSER).

Hence, the study suggests that removing the subsidy would not only reduce overcapacity but also promote more sustainable fishing practices. The report advocates phasing out the premix fuel subsidy and redirecting the US$40million saved toward programmes that directly benefit fishing communities.

These could include capacity-building initiatives, support for alternative livelihoods and promoting sustainable fishing techniques to ensure the sector’s long-term viability.

Indeed, the study argues that removing the subsidy may create short-term difficulties for fishers as they adjust to market-priced fuel; however, the long-term benefits – including recovery of fish stocks and a reduction of overcapacity – would outweigh the challenges.