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26.03.2009 Editorial

Fuel price change & concomitant smuggling


Before and during the 2008 presidential elections, fuel became a topical issue that was widely debated. The then opposition National Democratic Congress (NDC) insisted that the ruling government had overburdened Ghanaians with cut throat fuel prices as a result of the tax component that added to the cost. Following this, the Committee for Joint Action (CJA), a pressure group, organized series of demonstrations to protest against the high fuel prices.

After failing to win the first round of the 2008 general elections, the then ruling New Patriotic Party (NPP) succumbed to public and political pressure and drastically reduced fuel prices. Despite this reduction, the NDC was still not satisfied and promised to further reduce the price if the party won power. In fulfilment of this promise, the new Atta Mills administration had no option than to reduce fuel prices by taking off some of the tax components in the price build up.

This has made fuel cheap in Ghana as compared to what pertains in our neighbouring countries. We have conducted a sub-regional search which shows that the commodity is sold for GH¢8.26 per gallon in Ivory Coast , GH¢8.44 in Burkina Faso , and GH¢6.32 in Togo , as against GH¢3.62 in Ghana . Realising the price disparities, unscrupulous Ghanaians have now started smuggling the commodity to the neighbouring countries and making huge profits at the expense of the state.

Our checks at both the Tema Oil Refinery (TOR) and the National Petroleum Authority (NPA) revealed that the demand for fuel within the past month has doubled. This is putting pressure on the relevant agencies in charge to meet the demand. With this development, The Chronicle wishes to appeal to the government to review the fuel prices upwards in the interest of the country.

Looking at the staggering nature of the national economy, Ghana cannot afford to use its scarce resources to import crude oil to the benefit of her neighbouring countries. As we hinted earlier, consumption of fuel products have doubled ever since the new reductions were announced -meaning the smuggling has really reached its peak. The Chronicle does not think a wealthy nation like America would be prepared to subsidize fuel for the benefit of countries surrounding her, so why should we embark upon that journey.

We are not calling for the same pricing of the commodity as it exists in the neighbouring countries, but at least the price could be adjusted to make it unattractive for smugglers. Alternatively, if the government is afraid of the political implication, then she must strengthen our borders to prevent the smuggling of the product. The Chronicle wishes to caution government that if she sits down unconcerned whilst the smuggling of the product continues, she would be laughing at the wrong side of her mouth in the near future.

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