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Petroleum price hikes: COPEC calls for review

  • SOURCE: Goldstreet Business | Editor
  • Published below is an edited version of an address by Mr Solomon Kotei, Vice Chair of the Council of the Chamber of Petroleum Consumers, Ghana (COPEC-GH), and General Secretary of Industrial and Commercial Workers Union (ICU) at news conference on January 26, 2018 in Accra.

    COPEC-GH has invited you here on a very critical issue that affects workers of Ghana and the ordinary Ghanaian in general – Hikes in petroleum prices, general associated hardships and the need to scale down on some of the taxes choking the current price build up.

    Government after government has played politics with the pricing of petroleum products over the years with all sorts of promises to reduce the pump prices before ascending power but woefully fail because taxing petroleum has become the cheapest means of generating revenue for the country and its development. But what is development when the people it is meant for are squeezed and made to live under harsh economic conditions and pay cut-throat prices for petroleum products?

    What is even troubling is that close to fifty per cent of the total cost of fuel in Ghana at the pumps is nothing but one tax or the other with the Special Petroleum Tax alone pegged at 15 per cent on ex-depot price position which currently translates into 0.53 pesewas per litre; thereby meaning Ghanaians pay on each gallon of 4.5 litres; a tax burden of GHS 2.39.

    COPEC-GH considers the Special Petroleum Tax (SPT) as not only nuisance but avoidable in the face of rising prices on the world market as this tax was introduced in 2015 to shore up some revenue at the time when international market prices had dipped below US$30 per barrel. One wonders why this particular tax has not been scrapped altogether since world market prices started picking from late 2016. We find this particular tax very unsustainable at current levels of above US$60 per barrel.
    The reduction by the current government of the SPT from 17.5 per cent to 15 per cent as was contained in the 2017 budget was simply mathematical as in reality the actual value has rather shot up over the past due to rising prices on the international market without any attempts to scale down further. We call for the immediate removal of this particular tax and others as contained in our earlier petition to the President in order to reduce the unnecessary pressures on our pockets and to also help stabilise the pockets and incomes of Ghanaian workers and the populace.

    The SPT must be scrapped and government must no longer hesitate to do what is fair and just for the ultimate good of Ghanaians. We are also mindful of several other avoidable taxes on the price build up and once again reiterate our call for a further downward review of some of the tax elements contained in the petroleum pricing build up as we believe government equally makes some serious gains or incomes with the surge in world market prices since Ghana is also a crude- producing country that enjoys all the positives that price increases on the international market bring.

    From the foregoing, COPEC-GH believes a gallon of petrol and diesel at the pump should not be sold beyond GHS18 instead of the current unbearable rate of above GHS20 per gallon. The net effect of these rampant pump prices’ increases is a corresponding increase in prices of foodstuff, goods and services, import duties and inflation, as basic necessities of life shoot up in the face of rather stagnant meagre incomes and salaries of the Ghanaian worker.

    Government as a matter of urgency will need to give Ghanaians some relief by reviewing the numerous taxes in the petroleum pricing build up to bring about some stability and reductions to ease the pressures on our pockets. We encourage the government to rather introduce new and ingenious ways of expanding the tax bracket to attract more revenue. Rather than the over-concentration on petroleum taxation, the government must proactively explore other revenue-generating sources for national development as the over-dependence on petroleum taxation affects every aspect of our lives and that of the economy generally because of its chain effects. Not even the size and price of ‘kenkey’ is spared.

    The current situation, if not urgently addressed by government, will certainly leave Ghanaians with having to cough up even more cash to be able to go by their daily activities in the face of harsh conditions of living to pay for further increases in petroleum products in February.

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