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16.05.2007 General News

Gov’t cushions poor against fuel prices


The conversion of the Ad Valorem Excise Duty to Specific Duty has controlled increase in ex-pump prices leading to a significant reduction in the excise duties on kerosene, premix and diesel.

Professor George Gyan-Baffour, a Deputy Minister of Finance said the government abolished these ad valorem taxes, which were percentages of the ex-refinery price of petroleum products.

He said: "Now, the excise duty is fixed and flat even when petroleum products prices fluctuate on the international market and by so doing the impact on the economic fortunes of the poor is lessened."

Prof Gyan-Baffour said these in response to a question in Parliament on measures put in place to help cushion the poor against the impact of the global rise in crude oil prices.

The Social Impact Mitigation Levy in the petroleum price build-up introduced by government allows government to use such funds to better the lot of the poor through social programmes like the Metro-Mass Transport.

The Deputy Minister said funds accruing from the Social Impact Mitigation Levy are partly used as capitation grant for school children and also support the Free Compulsory Universal Basic Education (FCUBE), as well as the school-feeding programme.

He said the National Petroleum Authority (NPA) has the responsibility for monitoring and fixing the maximum indicative prices and allowing the oil marketing companies to set their own prices.

He said: "This process has promoted competition at the service stations, thereby giving the poor the option to choose from where to buy oil products and this in effect has given the poor value for their money."

"Government in its efforts to help the poor has been delivering premix fuel and marine gas oil to fishermen at subsidized prices thus reducing their cost of production and making more money available to them."

Source: GNA