Fuel prices to drop further; as Gov’t hints of ‘bailout’ plan for BDCsThere could be a further reduction in the prices of petroleum products as the government has hinted of plans to provide financial assistance to the Bulk Distributing Companies (BDCs) to help them secure good deals at the trading level.
This would enable the BDCs to purchase the finished products in large quantities and get premium on the international markets which would see the products sell at reduced prices at the retail level, Deputy Finance Minister, Kwaku Kwarteng said on the Super Morning Show on Joy FM, Friday.
The assurance follows concerns raised by the General Secretary of the Industrial and Commercial Workers’ Union (ICU), Solomon Kotei, that the removal of 2percent of the special tax on petroleum products, will only benefit large industries rather than the ordinary people.
The Special Petroleum Tax (SPT) which was introduced in 2015 by the National Democratic Congress (NDC) administration in 2015, saw consumers pay a 17.5 percent tax on the products at the pumps, to prop up government finances due to the dwindling world market prices of crude oil then.
But the New Patriotic Party upon coming into office in 2017, slashed the tax by 2.5 percent. On Thursday, Parliament passed the Special Petroleum Tax amendments bill 2018 to reduce the levy from 15 to 13 percent.
This means a consumer would be paying about GH¢4.50 pesewas for a litre of petrol instead of GH¢4.67 pesewas beginning Friday, February 16, 2018.
Mr. Solomon Kotei had hoped the entire levy would be scrapped to bring total relief to consumers since the price of the product at the moment has seen a marked improvement on the world market.
But Mr. Kwarteng maintains “what we have done is sufficient, it is to help business [and] cushion them from unnecessary price hikes” while at the same time ensure the government achieves its revenue projection and support ongoing programmes and projects.
“This is a government that has taken on a lot more responsibilities; we are now doing Free SHS which requires funding, we are now [giving] support for teacher trainees [and] we are putting considerable money into the national ID card project which is the real way to modernise our society and economy…”
“This is not the time [to scrap it] when we have programmed into the 2018 budget,” he argued.
The Obuasi West Parliamentarian is, also, confident that the plan to offer financial support to the BDCs would help bring prices down at the cost levels “and I am very sure the impact will be felt by consumers.”
“We are looking at supporting our BDCs to have better deals at the oil trading company level…and sometimes by finding money and even buying in large quantities [so that] we get premium on the international market,” Mr. Kwarteng told Show host, Daniel Dadzie.
“We are taking further steps at the trading level to ensure that we have better deals for Ghanaians. We respectively expect Ghanaians to take their time and appreciate what we are doing for and to support us if it will help the economy,” he said positively.