The National Petroleum Authority (NPA) on Monday said in spite of the recent increment in petroleum prices government still maintains a 73 per cent subsidy on Premix fuel, as well as some subsidy on the prices of petroleum products.
A statement to the Ghana News Agency signed by Mr Alexander Mould, Chief Executive of NPA explained that Government maintained eight per cent subsidy on premium, 52 per cent on kerosene, six per cent on Gas oil, 13 per cent on Marine Gas Oil (Local), and 35 per cent on Residual Fuel Oil (RFO).
The NPA explained that without government intervention the consumer would have been paying GHȻ2.21 per litre (GHȻ9.98 per gallon) for petrol instead of GHȻ2.0496, (GHȻ9.22/gallon) for instance.
According to the NPA the consumer would have paid GHȻ2.28 for LPG (GHȻ28.59/12.5kg) instead of GHȻ1.9485 per kg, and a 12.5kg cylinder would have sold at GHȻ24.36.
The NPA at the weekend adjusted petroleum prices with effect from Sunday, February 17. Petrol and diesel went up by 20 per cent; 15 per cent for kerosene, marine gasoil local and residual fuel oil (RFO) and 50 per cent for LPG.
According to the NPA the price for premix fuel remains unchanged at GHȻ0.5427 per litre.
The NPA explained that the calculations were based on the crude oil price of $116.00 per barrel and an exchange rate of GHȻ1.89/USD.
Meanwhile, an Energy Analyst, Dr Isaac Amo-Antwi said that full deregulation of the petroleum market was the key to unlocking the nation’s intermittent fuel price debacle.
Dr Amo-Antwi told the Ghana News Agency that, the lifting of certain governmental interventions on several aspects of the oil industry would eliminate undue government interference in the pricing, export and importation of oil products and the establishment of retail outlets.
He said a deregulated regime would also empower oil marketing companies to import petroleum products directly from foreign suppliers, which would enhance competitiveness on the market.
He explained however that a deregulated regime does not mean that government would loose all power and responsibility over the industry.
“While importers can import the volume they need and from whatever source, they would have to notify the NPA of intention, deeds and processes of any importation.
“The importer also needs to make sure that any importation conforms to international standards of quality and specifications”, Dr. Amo-Antwi stated.
He debunked the notion that deregulation would lead to fuel price hikes, stressing that deregulation will rather make the industry more competitive and offer the customer alternatives as to which fuel station or company to patronise.
Dr Amo-Antwi said on the contrary, deregulation and competition would encourage oil companies to be more effective and efficient; they would be compelled to improve their services.
“Under a regulated set-up, however, domestic oil companies have few reasons to strive to meet world class standards because the oil companies are guaranteed returns on their investments, hence there is no incentive for them to stretch to provide customers with better services.”
He said: “However, under a deregulated environment, the industry players would have to compete aggressively against each other for customers and consequently, returns on their investments”.