The National Petroleum Authority (NPA) has stated that it will not review downwards the prices of petroleum products, in spite of falling global oil prices.
This is to enable the government to pay off the GH¢412 million debt piled up as of July this year due to high under-recoveries of petroleum products.
So far, the government has only been able to recoup GH¢174 million, which represents 42 per cent of the amount, due to the non-review of prices in the last three months up the end of October this year.
The Public Relations Manager of the NPA , Mr Yaro Kasambata, told the Daily Graphic in an interview that any downward review of petroleum prices could disrupt the supply of services, especially at this time of the year.
On Wednesday, December 3, this year, scores of taxi drivers took to the streets of Accra to protest the decision by the government not to reduce the prices of petroleum products, although crude oil prices on the world market had fallen to a five-year low.
The demonstration, which was under the umbrella of the Ghana Committed Taxi Drivers, was dubbed “Obiaa Ho Wom Demonstration”.
Clad in red attire and carrying placards with inscriptions such as “Mahama, Yéé bré. We are waiting for 2016”, “Mahama, Reduce the fuel”, and “Drivers abré”, among other issues, the protesters marched through some principal streets of Accra.
The drivers said the NPA had always increased the prices of petroleum products in line with increments in world prices of crude oil but had refused to reduce them when crude prices fell on the international market.
In a statement issued in Accra last Monday, the New Patriotic Party (NPP) called on the government to reduce fuel prices.
It said as a matter of urgency, the government should apply the automatic adjustment formula to reduce the price of petrol.
The statement signed by Nana Akomea, Communication Director of the NPP, said the current hardships caused by the high cost of living were not sustainable.
The NPP said Ghanaians deserved some relief now from the immediate reduction in the price of petrol in accordance with the reduction in the prices of oil and the dollar.
The NPA, in a statement issued in Accra yesterday, however, explained that “under normal circumstances the NPA would have reviewed downward prices at the pump to reflect the current prices of refined petroleum products on the international market”.
However, it said due to the high under-recoveries of GH¢412 million as of the end of July 2014, it was unable to review the prices of petroleum products downwards.
The statement said over the past three months, as a result of prices remaining the same at the pump, total over-recoveries that accrued amounted to GH¢174 million.
That amount, the NPA said, had been used to defray part of the outstanding under-recoveries of GH¢412 million .
That had resulted in a decrease of about 42 per cent in the total under-recoveries of GH¢412 million to GH¢237 million as of the end of October 2014.
Brent crude has fallen to about $56 a barrel from $115 in June, sparking widespread calls in the country for a slash in the prices of petroleum products.
But Mr Kasambata said petrol prices would only be slashed downwards if current prices were sustained for the government to recoup its remaining debt of GH¢237 million as of October 2014.
“In the interim, the NPA will continue to monitor prices on the world market and if the current downward trend continues, we will evaluate the situation and use part of any over-recoveries accrued to offset the current under-recovery bill (debts owed BDCs), as well as use part to do a downward adjustment in prices at the pumps to the benefit of consumers.
“This is also to ensure that supply of petroleum products to the market is not adversely interrupted in view of the upcoming festive season. The NPA will continue to ensure that there are no supply disruptions on the market,” the NPA said.
Last November, Sri Lanka, India, Indonesia and Malaysia reduced fuel subsidies to take advantage of lower world prices.
In Ghana, though the NPA says it has observed a reduction in the international prices of crude oil and refined petroleum products, as well as a stability in the Ghana cedi/US dollar exchange rate, which are the key determinants of petroleum prices, it cannot reduce fuel prices because total over-recoveries that accrued amounted to GH¢174 million, which has been used to defray part of the outstanding under-recoveries of GH¢412 million.
Source; Daily Graphic