John Attafuah – NPA Boss CONTRARY TO speculations that the recent drop in fuel prices was particularly effected by government to canvass for more votes come December 28, this year, John D. Attafuah, Chief Executive of the National Petroleum Authority (NPA), has noted that the reduction is not politically motivated.

Speaking at a press conference on Tuesday in Accra, the NPA boss said the price reductions, which were a direct repercussion of developments on the world market, could not have come at a better time than Thursday, December 11.

“Our own intelligence reports suggested that delaying a new price announcement until Monday would have led to shortages on the market which in this Christmas and campaign season would have sent a very strong signal to the public. Therefore, we decided to implement the new prices immediately to avoid any leakages and the consequent shortages that were likely to hit the market.”

He added that after meeting oil marketing companies on Wednesday, December 10, NPA learnt that liftings had reduced by about 30 percent – a development which strongly pointed to a deficit at the end of that week, hence the announcement on Thursday.

According to him, two factors are used in the determination of petroleum prices on the local market namely; world prices of crude oil and products, and the exchange rate between the cedi and the dollar.

“While prices of crude oil and petroleum products have been on the decline on the world market, the dollar, on the other hand, strengthened against the cedi making the local prices of petroleum higher than they should otherwise have been if the rate had stayed flat.

“Despite increases in crude oil prices to the record US$147 per barrel on July 14, 2008, the motoring public in Ghana continued to buy fuel at the same prices set on May 3, 2008, as modified by the tax reductions of May 26, when the crude oil price was US$116 per barrel.”    

The NPA boss continued that the authority concluded its evaluation of the situation and consequently resumed its bi-monthly reviews.

On November 1, 2008, fuel prices dropped between 8 and 13 percent. There was a further reduction of between two and six percent on November 16. Again on December 1, prices were lowered by four percent on average and then on December 12, there wee further price reductions of between 14 and 30 percent.

Mr. Attafuah additionally said as a result of the price freeze between May 3 and September 31, this year, the Tema Oil Refinery and other oil trading companies recorded losses to the tune of about US$186.61 million out of which about US$42 million has so far been paid.

“Let me reiterate that the NPA Act, Act 691 of 2005 ejoins the authority to protect the interest of both consumers and petroleum service providers. While we expect consumers to benefit from price reductions on the world market, it is also important for us to ensure that petroleum service providers do not suffer unduly.

The Act requires that “the authority, in performing its functions, shall not be subject to the control or direction of any person or authority other than the minister who may give policy directions”.

Touching on the impact of the reductions on transport fares, he expressed delight that executives of the Ghana Road Transport Coordinating Council have swiftly acted to adjust transport fares in tandem with the new prices and called on the public to applaud them. By Samuel Boadi
Source: Daily Guide - Daily Guide