Ghana increased its prices on petroleum products December 29, 2011 citing two key factors – the increase in crude oil prices and the depreciation of the Ghana cedi. The country has also cut subsidies fuel prices. As at September 30, 2011, the government has subsidized the ex-pump price of petroleum products to the tune of GH¢267.61 million.
A statement signed by Mr Alexander Mould, Acting CEO of the National Petroleum Authority (NPA), said the prices of petrol and diesel will go up by 15% each at GHp175.48 per litre and GHp 177.09 per litre respectively while LPG will go up by 30% at GHp 136.19 per kilo.
Even though, the NPA stated rising world prices of the commodity and depreciation of the Ghana cedi currency, reports suggest the increases were due to pressure by the International Monetary Fund (IMF) on Ghana to stop subsidising petroleumproducts.
The Reuters news agency reports December 29, 2011 that “Ghana, which joined the club of oil producers in West Africa last year, has come under increased pressure from the International Monetary Fund to remove the fuel subsidies.”
Countries such as Nigeria, Guinea, Cameroon and Chad are reported to have come under similar intense pressure from the IMF to remove subsidies.
According to the report, the IMF argued that the fuel subsidies are not effective in directly aiding the poor but rather promotes corruption and smuggling.
Reading the 2012 budget themed “Infrastructural Development for Accelerated Growth and Job Creation,” Ghana’s Finance Minister Dr. Kwabena Duffour said November 16, 2011 that “Government has had to subsidize ex-pump price of petroleum products to the tune of GH¢267.61 million as at September 30, 2011.”
The entire under-recovery of petroleum pricing for the year, Dr Duffour says is estimated to be GH¢364.94 million based on the assumption of crude oil price of $110.23 per barrel.
He attributed the cost of subsidy to the rising crude oil prices on the world market.
By Ekow Quandzie