Fuel Price Increment Should’ve Been 36%, But….

The Chief Executive Officer of the National Petroleum Authority, Moses Asaga has called on Ghanaians to cooperate with government in the wake of the recent increase in petroleum products.

According to Mr. Asaga, fuel is not a cheap commodity and as a result, government cannot continue to subsidize it. He noted that the current fuel price increment is a step in the right direction.

The NPA announced an average of 23 percentage increase in the prices of petroleum products effective Monday, July 14, 2014.

The increments, according to the NPA, are the result of the government's withdrawal of subsidies. The NPA further claims the cedi depreciation is to blame for the 23 percent increase in fuel prices.

Due to this, petrol has been increased by 23%, diesel 22%, LPG 15.68%, kerosene and premix by 23.75% and 25.6% respectively. This has led to an increase in transports fares with many commuters outraged by the recent hikes.

Speaking in an interview with Peace FM's morning show host Kwami Sefa Kayi on 'Kokrokoo', Mr. Asaga explained that should the Government of Ghana continue to subsidize petrol, it would run into arrears and accessibility to petroleum products by the Bulk Distribution Company would be hindered.

'I think that Ghanaians should just bear with us and know that petrol is not a cheap commodity and to also know that the government cannot sustain subsidy. Therefore, we must pay a little bit more to get a constant supply of fuel,' he said.

He however disclosed that though subsidies on petrol have been removed, the NPA is not doing full cost recovery.

The NPA, he said, should have increased petrol prices by 36 percent but to Mr. Asaga, looking at the plight of consumers, they rather reduced by an 11 percent margin.

To him, it is a prudent decision by government for the nation to pay the economic price so that petrol would be available on market.

'with the global economic situation and our peculiar situation now, the government thinks that instead of subsidizing more and more on fuel; they could rather use that subsidy to do other things like National Health Insurance. They can do things like the Common Fund. They can do things like MASLOC for macro, small-scale industry etcThere's no subsidy on petrol or diesel but we have not gone full cost recovery," the NPA boss said.