Ghana to remove all subsidies on petrol and diesel

As from July 1, 2013, consumers of petroleum products especially petrol and diesel in Ghana will bear the full cost of buying these products.

Speaking on the sideline at the Institute of Financial and Economic Journalists (IFEJ) and Ghana Business and Finance media seminar on fuel subsidy for journalists in Accra Tuesday June 18, 2013, the Head of Pricing at the National Petroleum Authority, Mrs. Alpha Okaidja Welbeck revealed that, “government has allowed us to price on full cost on petrol and diesel”.

Pre-mix fuel, marine gas oil local, kerosene, residual fuel used by industries will however remain subsidized, she added.

Last year, President John Mahama, at that time the Vice President, said that government needed GH¢760 million to continue subsidizing fuel annually, an amount he said could be used to undertake development projects across the country.

He also said government was battling with an outstanding $80 million debt that was incurred as a result of subsidizing petroleum products, and until that was cleared, the country could experience shortage in fuel.

Meanwhile, the Chief Executive Officer of the National Petroleum Authority (NPA), Mr Alex Mould, said ealier this year that the payment of subsidies on all petroleum products at the current level is not sustainable and should be abolished to save the sector from crisis.

Mr  Mould, then called for an upward adjustment in the prices of petroleum products — petrol, diesel and LPG — to totally remove the subsidies on them.

Justifying  the removal of the subsidies, he said the recent 90-day hold-up in the payment of subsidies had a consequential delay in letter of credit payments, resulting in the delay for scheduled delivery of petroleum products onto the Ghanaian market.

Mr. Mould who was speaking at a roundtable organised by Citi FM, in Accra said one way to increase the prices without Ghanaians feeling the sudden huge increment was for the NPA to be “allowed to implement the pricing mechanism based on the petroleum pricing formula to be executed every two weeks, monthly and quarterly”.

By Pascal Kelvin Kudiabor