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12.03.2003 Feature Article

The Petrol Factor

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I have read with keen interest the reaction of most Ghanaians to the 95% petrol price increase. The reaction ranges from condemnation to “the government has to do it”. The government’s explanation was that the 95% increase was to salvage Tema Oil Refinery (TOR) or that TOR’s debt was going to bankrupt the whole banking system and for that matter, the whole country. The government claimed she was not aware of the size of TOR’s indebtedness. I am surprised that a lot of Ghanaians have accepted this explanation whole-heartedly. Before the NPP assumed power, they definitely did not have direct access to TOR’s financial position. But they have been in power for 2 years! For any government or organization to be effective and successful, it must first identify its priorities and or problem areas. Even from a very distant position like mine petrol is the single most volatile factor in our economy. If I were a government leader that will be priority number one. The 95% escalating response to the petrol price increase in the country underscores this point. When the NPP took over, a gallon of petrol was 6,400 cedis. The government decided to boost it to 10,800 cedis as soon as she came to power. The explanation was; the government could not subsidize petrol any longer and thus wanted to align petroleum product prices to the world oil prices. That was reasonable enough since TOR financial position had been ruined by the Rawling’s government. At the time of the above increase, world oil prices ranged from $25 - $30 a barrel. However, there was some oil price bonanza for the government when world oil prices dipped far below $20 per barrel for a considerable part of 2001 & 2002. There were cries for the petroleum prices to be reduced since the government said she wanted to align prices to the world oil prices. The demands were justified but I felt the government should save any dips in prices for scorched earth days like now. The government current explanation for the 95% jump has two implications. First, the government did not make any savings when the oil prices dipped. Secondly, the government had not paid any proper attention to the Team Oil Refinery. True, the NDC left the finances of TOR in shambles. For political reasons, the NDC government played games with petrol prices. There was extraordinary corruption and incompetence. The Quality Grain and GNPC cases were just the tips of the iceberg. Supporters of the NDC government would even admit that the country was left in abject ruins. This was the reason why the NDC was thrown out of power. The Kuffour government came to power to rescue this desperate condition. Since the NPP came to power petrol price has risen from 6,400 cedis to 20,000 cedis!!! Prices for water and electricity keep spiraling. The bleeding has not stopped. Any doctor who attends to a patient oozing with blood must first stop the bleeding. These factors put too much financial pressure on the average Ghanaian with the resultant accelerating crime and social decay. A fellow Ghanaian said, “you are rushing to judge the Kuffour government and that Rawlings took 20 years to leave us in our current state”. The NPP has been in power for only 2years. My response was; if we’ve had the courage to question the Rawling’s government, we probably would not have been in this situation. There are areas the government seems to be trying. The government is trying to head off the scary acceleration crime by arming the police with the proper tools to do their job. It must be noted that the court bail system is not working. The NPP has a workable majority let them pass laws to change the bail system. Democracy should not be merely talking about the rule of law, it must be seen in action. The government seems to be weak in contract negotiations. An example is the Telenor deal. I read last year that the government had selected Telenor from Norway as Ghana Telecom partners and that Telenor was to present their business plan before the final contract was to be written. How could we select a company without us knowing their business plan? Upon what basis was Telenor selected then? The NDC contract with the Malaysians was abhorrent and detrimental to our interest. Do we need to repeat this with the Norwegians? Don’t we learn? Anybody who cares about our economy knows that the government must pay serious attention to the ports (custom duties), Internal Revenue Department, Ghana Commercial Bank, Volta River Authority, Tema Oil Refinery, Ghana Petroleum Purchasing Corporation, Ashanti Goldfield, Ghana Water Corporation. These public corporations and departments are going to keep us afloat or drown. Since the Rawling’s chain years there has not been any famine. God has blessed us. Nature has been kinder to Ghanaians than our leaders. Without the abundant food where would the ordinary Ghanaian be, paying 20,000 cedis for a gallon of Petrol?

Kwamina Mbra Panford
Kwamina Mbra Panford, © 2003

The author has 8 publications published on Modern Ghana. Column Page: KwaminaMbraPanford

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