Removing subsidy will be suicidal

The Daily Graphic yesterday reported that fishermen along the country's coast have kicked against the agitations for the removal of subsidy on premix fuel.

The paper quoted the fishermen as saying that abolishing the subsidy would further undermine the local industry to the advantage of importers of frozen fish, since their production cost would go up and make their business uncompetitive.

Those agitating for the removal of the subsidy arrived at their conclusion based on the rampant diversion of the product, which is meant for the fishing industry only. One cannot, therefore, condemn them since they are seeking the well being of the country. The Chronicle does not, however, agree that subsidy on the product must be removed as a result of this problem of diversion. Poverty among the people living along our costal line is very high, and since majority of these people depend on fishing as their main source of income and livelihood, removing the subsidy would aggravate their plight.

It would also increase the cost of food in the country, since the fishermen would definitely transfer the high cost of production to consumers of their products. As noted by the fishermen, it is importers of frozen fish that are going to benefit from such a situation, since their products would be relatively cheaper. By patronizing the latter, we would rather be creating employment for people in the countries where we import these products from, when we are also grappling with high unemployment in the country.

As we noted earlier, those behind the agitation for the removal of the subsidy are seeking the interest of the country, but government must study the situation carefully before accepting or rejecting their demand. We at The Chronicle think the best way to deal with the problem at hand is to strengthen the method for the distribution of premix fuel in the country. As we noted in this very column recently, the national security should be brought on board to police tankers that lift the premix fuel from Tema Oil Refinery to any destination in the country.

The diversion of the commodity is on the ascendancy, because the existing mechanism for checking the malpractice appears to be porous. Since these inefficiencies were not caused by the fishermen, it would be wrong for the government to pass their ineptitude onto them.