Subsidies may be the only way to control fuel price escalation - NPA

The Head of Economic Regulation at the National Petroleum Authority (NPA), Abass Tasunti, has indicated that subsidies may be necessary to counter the continuous increase in fuel prices.

Speaking on Citi FM and Citi TV's The Big Issue on April 20, 2024, he emphasized the need to properly investigate and understand the factors behind the price surges, noting that this issue is not unique to Ghana, but is of global concern.

“It is important to know what is accounting for the rise, and the rise is not peculiar to Ghana. Even the US and Europe, they are also grappling with the same situation and every country is concerned,” he said.

He pointed out that subsidies may be the only way to mitigate the increment in prices, stressing that since the cessation of subsidies in July 2015, Ghana has been more vulnerable to price fluctuations.

“The only way to keep the price from moving up is to subsidise but we are all aware that Ghana has stopped doing that since July 2015 because of its own challenges and so we are exposed to the volatility of the prices,” he said.

Tasunti pointed out that countries importing fuel in US Dollars are hit harder when their local currency weakens, leading to a compounded effect on prices in Ghana.

“Countries that tend to import fuel using US dollars tend to suffer more when their currencies are not that strong, so Ghana will have a double impact,” he added.

He further explained that the exchange rate plays a significant role in fuel pricing, as the cost of petroleum products is tied to the US Dollar. The combination of these factors has led to the current situation of rising fuel costs, he added.

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