The Minority spokesman on Finance and Economic Planning, Mr. Moses Asaga and MP for Nabdam in the Upper East region has said that the New Patriotic Party (NPP) government would lose the December elections should it increase the retail price of fuel, which is inevitable with regard to the current world market price of crude oil of $45 per barrel.
Mr. Asaga asserted, “ Ghanaians would no longer accept any astronomical increase in price of fuel after the NPP government increased the price of fuel by about 96.4% in 2002 which was not needed.”
He explained that the NPP government, knowing very well that the good people of Ghana would not accept any increase in the price of fuel had refused to implement its Automatic Adjustment Formula, (AAF) which it claimed would be used for future fuel price adjustments without government interference.
He has, therefore, challenged the President, His Excellency John Agyekum Kufuor and the Finance Minister Mr. Yaw Osafo Marfo to bite the bullet as they did in the 2002 and increase the price of fuel because the price of crude oil was far above the threshold of $35 per barrel when they adjusted the price in 2002.
Mr Asaga said this in an exclusive interview with The Chronicle concerning the escalating price of crude oil on the world market.
Meanwhile, the Director of the Institute of Statistical Social and Economic Research (ISSER), University of Ghana Legon, Professor Aryeetey urged the government to increase the retail price of fuel in the country as a result of the current world market price of crude oil price of about $45 per barrel which is above the government threshold The Governor of the Bank of Ghana, Dr. Pual Acquah, however, having a different opinion, said “the economy will contain the increases in the crude oil price because growing export earning, foreign exchange inflows such as remittances and the country's payment position will cushion the economy against increasing oil prices on the world market” (Daily Graphic 23rd August 2004.)
Mr. Asaga noted that Dr. Acquah misfired especially when he included foreign exchange inflows such as remittances to cushion the economy against the increasing price of crude oil on the world market.
He explained that foreign remittances went into individuals pockets and under no circumstance would they cushion the economy against the increasing price of crude oil.
Mr Asaga asserted that the NPP government was currently subsidizing the price of fuel to the tune of about ¢100 billion every month, using the petroleum levy fund and government sources from the consolidated fund He said the government had promised to use the petroleum levy fund to pay for the domestic debt, including that of the Tema Oil Refinery (TOR) which was owed to the Ghana Commercial Bank.
However, he said, the government was now using that money to subsidize the price, as a result of which the country's domestic situation had not changed since the NPP took office.
He explained that the economic implications for the state in government borrowing from the consolidated fund to subsidize the price of fuel, included the decline in the social and other sectors of the economy.
As well, investment and public expenditure would go down and the economy would not be able to grow as predicted by the government.
Mr Asaga challenged the government to use the much touted four months foreign reserve of crude oil if it was not an IMF and World Bank conditionality, in this critical situation that the nations finds itself.
He alleged that, “ The NPP claim of four months' foreign reserve of crude oil is IMF and World Bank conditionality but not for the benefit of the state.”
Mr. Asaga therefore warned Ghanaians that if they made any mistake and voted the NPP back to power, “I can put my last cedi to bet that this government would increase the retail price of fuel not less than 70% in February 2005,” he declared.
He appealed to the good people of Ghana to vote the NDC back to power so that they could continuo their aggressive exploration program to forestall the economy's vulnerability to the fluctuating price of crude oil on the world market.