NPA suspends fuel price increase

NPA suspends fuel price increase
Audrey Micah, Ghanadot

Accra, June 4, Ghanadot - Recently, the Committee for Joint Action (CJA) cautioned government not to repeat the mistakes of the NPP administration by instigating any attempt to increase fuel prices which it said deregulated the petroleum sector.

A leading member of the group, Bernard Mornah, maintained that the increases will deepen the hardships of the ordinary Ghanaian.

He said increases in petroleum products negatively affect all facets of the lives of the ordinary man and the CJA will not accept the transfer of crude oil price increases on the world market onto the consumers.

Fortunately, government has paid GH¢7 million to the National Petroleum Authority (NPA) to soak up projected increases in fuel prices for the period May 15 to May 31, this year.

It is also in the process of paying another GH¢10 million to cover under-recoveries accumulated since the last price adjustment and forestall any panic on the market.

This is in addition to GH¢145 million ($I06 million) the government had paid to the regulatory body to reduce the debt inherited from past subsidies in prices.

According to the Deputy Minister of Energy, Dr Kwabena Donkor, there must to be other option because in a cost-and-benefit analysis of the absorption of increases in fuel prices, the funds being expended in cushioning fuel increases could be used in providing infrastructure for schools and other social services.

He said even if the country had the resources, that option was not the best adding, however, that the current intention to absorb prices was within the context of the inefficient pricing formula being used currently to peg levies and taxes on fuel.

The deputy minister explained that to make up for the funds being used in under-recoveries of fuel levies, the government was tracking a number of options, including the fixed contract agreements with oil producing countries, steps to clear the inherited arrears of past under-recoveries and the directive to the NPA to take a second look at the pricing formula to get rid of any ineffectiveness.

Ghanadot