The Africa Centre for Energy Policy (ACEP), wants government to review downward, petroleum taxes following the full deregulation of the petroleum downstream sector.
According to the Executive Director, Dr. Mohammed Amin Adam, the objectives of the full deregulation of the petroleum downstream sector would not be met if government continues to charge taxes on petroleum products.
Dr. Amin Adam further stressed that the continuous imposition of “unnecessary” taxes by government gives a clear indication of government’s control of the petroleum sector.
The full deregulation allows the National Petroleum Authority, (NPA) to monitor and regulate the implementation of the pricing formula by the Chamber of Bulk Distribution Companies (BDCs) and Oil Marketing Companies (OMCs).
Dr. Amin Adam outlined reasons for the call in an interview with Citi News on the sidelines of the launch of the Energy Magazine in Accra.“Most of the taxes are no longer necessary under this full regulation regime. The only thing that will send prices back when crude oil prices begin to recover is the taxes that are imposed on petroleum products. Without those taxes, prices of petroleum products will then be influenced by the exchange rate and international prices,” he explained.
“When crude oil prices begin to increase and the exchange rate continues to depreciate and OMCs are having to adjust prices upwards, the only thing that can bring the prices to sustainable levels is when government removes some of these taxes,” Dr. Adam added.
Cross subsidy levy
Dr. Amin Adam described the charging of the cross-subsidy levy on consumers as “unnecessary.” He believes consumers can cross subsidise themselves at the pump.
“We do not even know whether government uses these monies to carry out its intended purposes,” he stated.
Bulk Oil Storage and Transportation (BOST) margin
On the continuous payment of the BOST margin, the ACEP boss called for it’s removal arguing that the BOST now gives out its facilities to OMCs and BDCs who in turn charge commercial rates for it.
ACEP also believes that the Exploration Levy should be scrapped immediately, since the Ghana National Petroleum Corporation (GNPC) now gets so much money from their share of the oil revenues accruing to Ghana.