Government has announced a reduction in margins on petroleum price build-up by 15 pesewas per litre from 1st April to mitigate the impact of the rising price of petroleum products at the pump.
The reductions, set to run for the next three months is expected to reduce the prices of petrol by 1.6% and diesel by 1.4%.
Minister of Finance Ken Ofori-Atta announced the reduction as part of government measures to mitigate the mounting economic challenges of the country.
He assured government will do all it can to ensure a consistent supply of fuel and manage the rate of ex-pump price increase by ensuring the Bank of Ghana (BoG) has access to adequate foreign exchange.
The margins marked for reduction as declared by the Finance Minister include BOST margin, reduced by 2 pesewas per litre; Unified Petroleum Pricing Fund (UPPF) margin, reduced by 9 pesewas per litre; and Fuel Marking Margin (FMM), reduced by 1 pesewa per litre.
The rising prices of fuel at the pumps, he said, is influenced largely by the rising crude oil prices on the international market and the exchange rate depreciation and indicated though the price increase should have been to Ghana’s benefit on a net basis, the country’s import of petroleum products amounts to 5.2% the value of the proceeds from its crude oil exports.
He said, “In 2022, we exported $3,947.70 million of which Ghana’s portion was $513 million. However, we imported $2,719.00 million of crude oil and finished products.”
“The purported windfall gain in foreign exchange is a mirage. From January to date, the average ex-pump price of diesel and petrol has increased by 57% and 45% respectively,” he added.
Mr. Ofori-Atta argued that unlike in other countries where the hike in crude oil prices and exchange rate volatility are leading to shortages in the supply of petroleum products, the government is implementing measures to guarantee a constant supply of petroleum products at the pumps,” he added.
He also announced a number of measures the government will take to mitigate the difficulties beyond the fuel price reductions and indicated the administration has already started spending cuts with Parliament’s failure to approve key revenue streams.
Minority’s response
The Minority in Parliament has, however, urged the Minister to rather send the measures he intends to pursue to Parliament so he could be helped to tighten and implement austerity measures to save the economy that is facing challenges.
Minority leader Haruna Iddrisu addressed the media after the presentation and insisted the Finance Minister has lost touch with reality and is not in tune with the state of the economy.
He said, “Our economy today is one that reflects nothing less than a cost of living crisis and the cost of doing business crisis, both for citizens and for businesses, who are unable to cope with a measure so announced by the Minister for Finance. We do not find his proposed measures adequate enough.”
“We need certainty and clarity. If you had an expenditure approval of GH¢145 billion, we expect that you tell us ‘I want to cut GH¢45 billion from it then we know that this is your commitment.”
“20% of this, 10% of that, we are still not certain how much expenditure cuts he intends to undertake,” he added.
Mr. Haruna Iddrisu discounted what he said was Mr. Ofori-Atta’s attempt to blame the minority on the unpopular E-levy and stressed his side is vehemently opposed to it in whatever form and character it will be brought to the House.
According to him, however, contrary to the Finance Minister’s claim the Minority made it clear it will not support E-levy but it did support the government on many of its revenue measures.
