The National Petroleum Authority (NPA) has explained that it will allow 10 percent reduction in the ex-pump prices of petroleum products, instead of the average 17 percent to allow Tema Oil Refinery (TOR) and other oil trading companies to recover some of the losses incurred during the period crude oil prices went up on the world market.
The prices of crude oil and petroleum products on the world market for the first half of the year was on the upward trend, and on May 3, 2008, President Kufuor intervened to reduce taxes on various commodities including petroleum products when crude oil has reached US$116 per barrel.
Mr John Attafuah, Chief Executive Officer of the NPA said this at a press briefing yesterday in Accra to explain some of the issues raised by the public after it announced the new petroleum prices.
He said prices of crude oil and petroleum products continued to rise on the world market after the President's intervention, reaching US$147 per barrel on July 14, 2008, adding that 'Despite this situation, the motoring public continued to buy fuel at the same May 3, 2008 price of US$116 per barrel.'
Mr Attafuah said the situation did not change until October, 2008. While the prices of crude oil and petroleum products declined on the world market, the US dollar on the other strengthened against the cedi, making the local prices of petroleum products still high compared to those set on May 3, 2008.
'As a result of price freeze between May 3, 2008 and September 31, 2008, Tema Oil Refinery (TOR) and other oil trading companies recorded losses of about US$168.147 million', he added.
The Chief Executive said since the NPA is enjoined by The NPA Act 691 of 2005 to protect the interest of both consumers and petroleum service providers. The Authority, in consultation with the petroleum wholesalers, accepted the 10 per cent reduction to help them recover some of the losses.
This will enable consumers to benefit from price reduction on the world market, while petroleum service providers do not suffer unduly.
On transport fares, Mr Attafuah said before the announcement of the new prices, the NPA held separate meetings with the executives of the Ghana Road Transport Co-ordinating Council on October 24, 2008 and then with the Fare Review Committee comprising the Ghana Road Transport Co-ordinating Council, Ministry of Transportation.
The NPA boss said, new transport fares have been advertised since November 10, 2008, and have been communicated to members of transport unions, and added that 'it is our hope transporters will abide by the new fare to give passengers some relief.'