Former Chief Executive Officer of the Ghana National Petroleum Corporation (GNPC), Alex Mould, has backed calls for a review of some taxes charged on fuel prices.
Speaking on the Citi Breakfast show on Wednesday, Mr. Mould explained that some of the taxes have outlived their usefulness hence must be reviewed downwards or totally scrapped.
Currently, data from the National Petroleum Authority (NPA) shows that there are about 10 different kinds of taxes and levies on petroleum products.
Fuel prices hit all-year-high
Fuel prices have hit all-time high in September, with petrol selling at an average price of GHc4.29 at the pumps, and diesel going for an average of GHc4.23 per litre.
Although some observers have blamed the surge in fuel prices on the depreciation of the Ghana cedi as well as unstable prices on the international market, analysts believe the local taxes on fuel prices are major factors.
Mr. Mould in the interview called for a quarterly review of the forex rate margin and a scrap of the BOST levy.
“I think one of the areas is the forward forex rate. It is an anticipatory rate – what they anticipate the [exchange] rate to be at the end of the period where they are supposed to have sold the product, and collected the money and buy the foreign exchange – I think that should be looked at.”
This he said is because per the forex rate margin, assuming the rate is “5% and the actual exchange rate is 1% percent, then the consumers are paying an extra four percent, so I think rather it should be like a fund where a claim could be made by the BDCs for any unanticipated forex loss that they make. That’s an area that should be looked at because it may be too high and it should be reviewed quarterly.”
Mr. Mould argued that the BOST margin should be scrapped “because there is no reason for it to be there anymore.”
“BOST is operating as a commercial entity, and they have told us over the years that they are making a lot of profit. The BOST margin was put there so that we could have some strategic stocks…government has looked at ways of funding the strategic stocks so the BOST margin I think should go except BOST makes very strong case for it to be retained.”