Fuel Prices Goes Up By 9%

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As Subsidy Politics Breaks Economy

Barring any last minute decision, there could be a 9 percent increment in the price of petrol, diesel, LPG and Kerosene, but the price of pre-mix fuel and RFO, used by industries will remain same.

Reliable sources at the National Petroleum (NPA), said these increases have been necessitated as result of increases in the FOB prices on petroleum products on the world market (Petrol-37%, diesel 26% and LPG-43%) between February and now.

But the 9 percent increase in fuel price will not result in increases in transportation fares, because of an agreement reached between government and the Transport Unions, which ensures that unless upward fuel price adjustments exceed a 10 percent threshold, transport fares, will be increased only twice in a year considering other factors.

It was argued that there is a need to remove subsidy build-up to the tune of GHC 146 million which is causing serious liquidity challenges for the BDCs. This is necessary to avert crippling fuel shortages.

Studies, have shown that whereas subsidies were introduced to cushion the vulnerable and low income earners in our country, its benefits have been minimal because of the activities of unscrupulous persons who either divert, smuggle or adulterate some of the subsidized products.

These subsidy payments, will be channelled into further critical investment in health care, education, water provision, road construction, improved transportation, security and other social interventions like school feeding program, LEAP among others.

The Herald’s sources say already, government is making unprecedented investments in hospitals, schools, water and other important social needs.

To further mitigate the impact of initial upward adjustment of fuel price on Ghanaians, government has procured 116 buses for inter and intra-city transport. These buses, will soon be deployed and form part of a package to bring in almost 500 buses for metro mass transit, STC and Bus Rapid Transit (BRT) operations.
These buses, which will charge very affordable fares, will offer the general public a cheaper and more efficient alternative mode of road transport

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