Fuel Prices See 4% Reduction From Government After 28% Increment

Government has offered a 2% reduction in petroleum taxes following a 28% cumulative increase in fuel prices since 2017.

Parliament is expected to mull over a motion seeking an amendment to the Special Petroleum Tax from 15% to 13%.

The motion is expected to be passed and receive presidential assent in some 24 hours.

The move following a demonstration eight days ago by the Chamber of Petroleum Consumers which has observed that since President Akufo-Addo came to power, petroleum prices have increased cumulatively by 28%.

Petrol and Diesel are sold for ¢ 4.67 per litre. COPEC has warned, it would hit the streets again if their concerns do not get the government response.

But responding to the concerns, the Finance Committee has tabled a motion in parliament under a certificate of urgency as the government wants to see a speedy approval to register marginal drops in prices at the pump.

"I think everybody recognises the urgent nature of this because prices have been skyrocketing", New Juaben South Dr. Mark Osei Assibey -Yeboah who is also part of the government's Economic Management Team told Joy News' Elton Brobbey.

The government is also in a race against time as the pricing window for petroleum products closes by close of day.

If the motion is encumbered in parliament, the government would have to wait till March 2018 when the next pricing window opens, a reason why it was brought under a certificate of urgency, the NPP MP explained.

He said a unique aspect of the amendment is that government has removed from the formula, a component of the tax that sees government make more money whenever fuel prices increase and vice-versa.

In the amendment, government will now get a specific tax component that is expected to see revenue unchanged irrespective of price fluctuations on the world market.

Photo: Dr. Mark Osei-Assibey
The National Petroleum Authority (NPA) after doing some computation indicated that under the automatic price adjustment formula, the prices of petrol and diesel will go down tomorrow by 1.39% and 2.6% in response to a drop in the price of petroleum on the international market.

Mark Osei-Assibey was happy to announce that the amendment bill will add to the NPA good news. He said that consumers could see a drop in petroleum prices at the pump by 3.39% while the price for diesel tumbles by 4.14%.

This, he said, translates into a marginal drop in petrol from ¢ 4.67 per litre to ¢ 4.51 per litre. Diesel for a litre is expected to be ¢ 4.48 from ¢ 4.67.

He said the reductions will see government lose ¢ 47.9million in expected revenue. But government feels the loss is part of a pledge to remove some taxes. The Akufo-Addo government has stressed it wants to shift economic policy from taxation to production.

According to the motion presented in parliament, the amendment shows that the government is proud to be a listening government following the recent protest.

But it also indicated that there were already ongoing to reduce the prices even before the COPEC demonstration.

Executive Director of COPEC Duncan Amoah said he welcomes the government's response although the "impact might not be anything significant for our pockets".

Story by Ghana|myjoyonline.com