The Chief Executive Officer of Ecobank Transnational Corporation (EDC), Mr Mike Cobblah, has said Ghanaians must be ready to accept the full cost of petroleum products in the country to save the country from the ordeal of having to subsidise the products.
He said providing subsidies on petroleum products has serious consequences on the economy and must not be continued.
In an interview on the implications of the recent petroleum price increases in the country, Mr Cobblah said the subsidies could be used to provide social amenities for the benefit of a greater number of people in the country and pointed out that subsidies brought a lot of debt overhang to financial institutions in the country while at the same time it had the potency to disrupt macro-economic stability.
Early this year, the National Petroleum Authority (NPA) announced a 30-per cent increase in the prices of some petroleum products due to the rising cost of the crude oil prices on the international market.
Mr Cobblah said there was no need for the government to take up a task which was not sustainable.
“For me, I join the school of thought that says that the petroleum price increases should be gradually done as per the prices of crude oil on the international market,” he said, adding that “it is better for us to pay smaller increments on the products than the one-time increase which throws everything out of gear.”
He called on Ghanaians to stop glorifying politicians when they subsidised the petroleum products and stressed that “we must accept to pay realistic prices on petroleum products.”
Mr Cobblah said the upward adjustment on the products would have an impact on inflation as any rational business man would take advantage of the increases in the price of petroleum products.
Since the announcement of the new prices, transport fares, for instance, have increased by 50 per cent instead of 18 per cent while the prices of foodstuffs and services have also been doubled.
According to him, this was highly likely to impact on inflation, saying “there will definitely be a blip but might return to normal later.”
Source: Daily Graphic