We used up all our savings in subsidizing fuel - Minister
The Minister of Energy, Prof Mike Aaron Oquaye, yesterday told The Chronicle that in the process of the country's deregulation, prices of fuel products might come down before or after the budget is presented to Parliament. “It does not depend on the presentation of the budget”, he added.
The energy minister said he could not tell how much petroleum products would cost after tomorrow, the target date for the start of deregulation, because the ministry does not set fuel prices.
Quizzed as to whether the deregulation was an imposition by the IMF, Prof Oquaye said, “Ghana is not under any pressure from IMF to deregulate the oil sector”. He declared that the process of deregulation started in 1996 and it has been discussed with the IMF over a period of time now. “We are looking at the reality and it is good”.
He explained that tomorrow was the date the government set for the start of the deregulation with her development partners, but does not mean subsidy on the petroleum sector would be completely removed. He could however not tell the time subsidy would be fully detached.
Prof Oquaye also told The Chronicle that deregulation in the downstream of the petroleum sector was not a one-day process but would take some time. “It is a process whereby the government would not be involved in the importation, processing and selling of oil.”
The minister held that $200 million was used to subsidize petroleum products last year, negating the $200million gain from HIPC. “This amount, could have been used to develop productive areas of the economy for the accelerated growth to take place”. He mentioned the establishment of simple food processing projects such as cottage industries.
The former ambassador to India stated that a bill for the setting up of the National Petroleum Authority (NPA) is being prepared to be laid before parliament very soon. The Authority would regulate the activities of the Oil Marketing Companies (OMCs), which will be expected to import crude and finished fuel products for the consuming public.
The NPA is expected to replace the current National Petroleum Tender Board which reports to the Energy Minister and therefore not as independent as the IMF required.