Govt Threat Of Removing Subsidy On Fuel Is Empty

Sat, 17 Dec 2011 Source: Quaye, Stephen A.

“Government Threat Of Removing Subsidy On Fuel Is Empty Since There Is No Subsidy” Development Data Challenges.

From: Stephen A.Quaye.

Development Data, a policy research and advocacy centre has reacted sharply to the government argument that the removal of the illegal price top-ups will lead to higher fuel prices describing it as deceitful.

The policy research and advocacy centre stated that the refusal by government and the National Petroleum Authority NPA to comply with the courts ruling on grounds that it will lead to high fuel prices is mischievous and disgraceful which is a set back to the rule of law.

The reaction of Development Data was contained in a press statement signed and presented to journalists by its research director Mr. Joshua Quashigah-Sowu, on December 14, 2011.This reporter got his copy through email.

“There is currently no subsidy on the sale of fuel in Ghana and the threat by government to remove subsidies from fuel prices in the face of the court ruling is laughable” he observed.

Mr. Joshua Quashigah Sowu, challenged the government to publish the full details of current fuel price computations as well as publish the statement of account on the ex-refinery differential accounts.

For the benefits of the public, he quoted the petroleum pricing formula made pursuant to the National Petroleum Authority Act,2005 ACT 691 as follows:

i. CIF =Cost [fob] + Insurance +Freight

ii. Related Charges +Off Loading Cost + In-transit Losses+

Inspection + /C Cost + Financial Costs +

Storage cost + In-plant losses + Rack loading cost+

Operating Margin

iii. Ex-Refinery Price=CIF +Related Charges

Iv.Ex-pump Price =Ex-refinery Price +Government taxes and

Levies + Distribution Margins

Per this formula at current crude oil price of US dollar 107.71 per barrel and exchanged rate of GH.1.61 per US dollar, a gallon of diesel for example should be sold at GH.5.96 at the filing station.

Meanwhile consumers are buying a gallon of diesel at GH.6.91 because the NPA has inserted an ex-refinery differential of 95 Ghp per gallon.

The research director at Development Data, advised the NPA and government to stop hiding behind the option of a court appeal to perpetuate what is clearly an illegal extortion abolished by a court of the land.

He therefore called on civil societies especially the institutions with representation on the NPA governing board, namely the Petroleum Workers Union, the chamber of commerce and the chamber of mines to take keen interest in the workings of the NPA to ensure that the rule of law and public interest are protected.


Columnist: Quaye, Stephen A.