03.09.2013 Business & Finance

Finance Minister justifies suspension of hikes on petroleum products

By Ghana l
Seth Terkper
LISTEN SEP 3, 2013
Seth Terkper

Finance Minister, Seth Terkper, has justified the government's decision to suspend a planned hike in prices of some petroleum products.

Although a civil society group, African Center for Energy Policy (ACEP), has admonished government to stop meddling in utility provider-consumer affairs, the Minister has insisted government the intervention is necessary.

John Peter Amewu, Director of Research and Policy at ACEP, told Joy Business on Tuesday that government's intervention in halting the price increase opens up the problematic issue of unsustainable government subsidies again.

He noted that the balance sheets of the utility providers, especially those of the Electricity Company of Ghana (ECG) and Volta River Authority (VRA) have not been the best because of non-payment of realistic tariffs by consumers, stressing the need for government to stop intervening on behalf of consumers.

"My worry is, are we as a country going to maintain this subsidy regime? And how long are we going to take that?...I don't think [the policy] is sustainable", he said.

However, Mr. Seth Tekper explained that the policy is sustainable. He said the Public Utilities Regulatory Commission (PURC), for instance, will ensure realistic prices are charged on consumers - as they are mandated to do.

"The policy is intact, government has not changed that policy. But that does not mean government is not going to watch other developments in the economy", the Minister said.

Meanwhile, the Minister, together with his deputies has started deliberations with Ministries, Departments and Agencies (MDAs) to examine what should go into the budget for 2014.

The Finance Minister met with the Minister for Roads and Highways, Alhaji Amin Amidu Sulemana, on Tuesday to determine how funding should be allocated to the sector next year.

According to government, this measure is important to ensure that projects are executed with due regard to the resources available.

Seth Tekper told Joy FM's Super Morning Show this is a sure way of ensuring that development projects do not get started when funds are not available.

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