Fuel prices to go up again

Fuel prices to go up again
Masahudu Ankiilu Kunateh, Ghanadot

Accra, June 30, Ghanadot - The National Petroleum Authority (NPA), the regulator of the Ghanaian petroleum industry has hinted that it will again increase the prices of petroleum products if the price of crude oil on the world market continues to push up.

The Executive Chairman of the NPA, Alex Kofi Mensah Mould noted that since his outfit, has been mandated by law to review petroleum prices every fortnight, it would be left with no option but to toe the line of the world market.

As at today (Tuesday), the price of crude oil on the international market rose above $71 per barrel. Additionally, the free fall of the Ghanaian cedi against the major currencies such as the Dollar, Pound Sterling and the Euro and the global economy uncertainties are having toll effect on the country as prices of petroleum products have to be adjusted always depending on these factors.

Recently, the NPA increased the prices of fuel by 30%, he said government had been modest, in that since the price of crude oil on the world market was 70%.

According to Mr. Mould, Ghanaians should not forget that the government had reduced petroleum taxes by almost 50% since is assumption into office, adding that it also reduced the prices by 10% on March 9, 2009.

He pointed out that fixing of the prices of the petroleum products is determined by three components namaely, ex-refinery prices, government taxes and margins from Oil Marketing Companies (OMCs).

"Government does not import crude oil. Tema Oil Refinery (TOR) does.Therefore since the fuel subsidies by the previous government was paid to the importers but effected merely through book entry, TOR got indebted", Mr. Mould indicated.

The TOR's debt component in the price build-up of fuel since 2001, stood at about GH¢80million annualy, but had been reduced to GH¢50million.

To add to this the government this week disclosed that it has paid $72 million to settle the Tema Oil Refinery (TOR) under recovery debt for 2008. a Deputy Minister of Energy, Dr. Kwabena Donkor, said government was committed to relieve TOR of its huge debt and enable it carry out its duties effectively to meet the demand of Ghanaians.
Dr. Donkor said the government would further examine TOR’s debts from 2005 to 2007 before it decided to pay them or not.

He said the government made provisions to pay off TOR’s debt for 2008 in this year’s budget because the new administration was notified of the debt during the transition.

In the case of the OMCs which experienced fuel shortages prior to the 30% hike announced by the NPA, Mr. Mould said those that had allow dealers to cheat them and get away with their money were going to find it tough approaching TOR for another consignment, and that could lead to the closure of their stations.

In Ghana, petrol now sells at GH¢1.11 per litre representing approximately GH¢5.00 per gallon, while diesel goes for GH¢1.12 per litre, making a little over GH¢5.00 per gallon.

Also, kerosene is GHP¢86.45 per litre representing GH¢3.90 per gallon and premix fuel sells at GHP¢51.48 per litre, making over GH¢2 per gallon.

Ghanadot