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14.02.2013 General News

AFAG Wants Fuel Subsidy To Stay

By Ghanaian Chronicle
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By Daniel Nonor and Masahudu A. Kunateh
The raging debate as to whether the government should remove subsidies on ex-pump fuel prices has drawn varied reactions from pro-poor activists and individuals who think removing the subsidies would further worsen the already deplorable economic conditions of many Ghanaians.

The National Petroleum Authority (NPA) set the tone for the raging debate on fuel subsidies when it called on the government to consider removing the current subsidies on liquefied petroleum gas (LPG), petrol and diesel.

The authority explained that the government would have to pay subsidies to a tune of about GH¢2.4 billion, considering the current crude prices, and a current 20% subsidy each on petrol and diesel, and the 66% on LPG.

Yesterday, a pressure group, Alliance for Accountable Governance (AFAG), waded into the subsidy debate with a stern argument on the removal of the subsidies, and the socio-economic implications it would have on the ordinary Ghanaian in the current economic circumstances.

'The Alliance for Accountable Governance is strongly opposed to the clandestine attempts by government to test public reaction on possible withdrawal of fuel subsidies. Government must note that there is a political risk to this unthinkable decision in the midst of the current precarious household economy of the Ghanaian.

'Besides, Government has not been able to account for some unrealistic levies (on petroleum and its derivatives), and where they have technically been efficiently allocated,' the group noted.

AFAG argued among others that 'the current pricing of petroleum is not realistic in the midst of a paralyzed Tema Oil Refinery (TOR), which until 2009, was working rather effectively.'

According to AFAG, there was lack of transparency on the use of funds generated from some levies such as the Social Impact Mitigating Levy (SIML), Road Fund, the TOR debt recovery levy, and other levies, and wants the government to come clean on these issues, before opting to remove subsidies on fuel.

AFAG argues further that: 'If subsidies were to be removed, a stronger and a more coherent case for their elimination would have to be made to the public, in order to gain legitimacy.'


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