Accra, September 26, 2017//-After using petroleum politics to hoodwink Ghanaians to vote massively for the then opposition New Party Patriotic Party (NPP) to tumble the National Democratic Congress (NDC) government in the December election, it is shifting the goal post just nine months in office.
The NPP government under the leadership of Akufo-Addo looked into the faces of Ghanaians and told them that they can’t control the rising fuel prices caused by multiply taxes. There are 11 taxes currently on the petroleum products.
It is important to state that the prices of petroleum products are mainly influenced by the world market price of crude oil, the tax element at the pump constitutes more than half of the ex-refinery price in the country.
Ghana’s Minister of Energy, Boakye Agyarko upset most Ghanaians when he told the Daily Graphic that it would not be prudent to isolate one variable in the fuel build-up without a comprehensive analysis of the price.
“The international market component is usually a demand-and-supply function, which is often affected by other geopolitical developments across oil producing countries,” he told the state-owned newspaper.
However reacting to the minister’s statement, the Member of Parliament for Mion Constituency in the Northern Region of Ghana, Abdul-Aziz Mohammed rejected the government’s claims that it has no control over increasing fuel prices.
He described the claim as “is unforgivable”. The opposition NDC MP stated: “Today, we are being told that government can do very little about the price of fuel in the country and that the world market decides the prices”.
Recently fuel prices went by 3% which has been blamed on the multiple taxes. The latest Monetary Policy Committee (MPC) report of the Bank of Ghana noted: “Since August 2017, there have been upward adjustments in ex-pump petroleum prices which are likely to transmit through prices in the coming months and pose some risks to the inflation outlook”.
Mr Mohammed recalled that“the government, prior to coming to the office, described some of the taxes by the then government as nuisance taxes yet we have high taxes on petroleum products today”.
“You don’t say one thing in opposition and then when you win, you say the other. This is the most deceitful government that we have ever had”, he collaborated on TV3’s New Day programme.
According to him, “they [NPP] said it was NDC, and for that matter the then President Mahama, who were increasing fuel prices, today when we talk, you say it is the world market and the dollar rate but they have a duty to maintain a stable cedi-dollar relations not the people of Ghana”.
Ghana’s Pricing
Mahama Hudu, energy expert at the Center for Energy Research-Ghana noted: “Pricing policy direction has been a problem to the people of Ghana and for the National Petroleum Authority (NPA). The prices of petroleum affect every single consumer directly or otherwise, so the NPA has decided to formulate the following formula for calculating petroleum prices in the country.
The effectiveness of this model is determined by prevailing market conditions. From the formula, crude oil prices, exchange rate, taxes or levies and margins are the factors that influence oil prices. Policy regulations and activities of government, the performances of TOR, Oil Marketing Companies (OMCs) and oil trading companies all play a major part in oil price determination.
The Formulae;
‘Ex-pump Price = Ex-refinery Price + Taxes/Levies + Margins
Ex-refinery Price = CIF + Related Charges
CIF = Cost (FBO) + Insurance + Freight
Related Charges = Off-loading Cost + In-transit Losses + Inspection + L/C Cost +Financial Cost + Storage Cost + In-plant Losses + Track Loading Cost +Operating Margin’.
Some economists have argued that the government could have removed some of taxes on the petroleum products to help ameliorate the suffering of the people.
The government has majority MPs in Parliament can table a motion to knock off the nuisance taxes in the petroleum product cost-build up.
By Masahudu Ankiilu Kunateh, African Eye Report
Email: mk68008@gmail.com
