2% Fuel Price Reduction 'Is An Insult'

It has been hailed as “a big relief to everybody”, but Member of Parliament for Tamale North, says the 2% reduction in the controversial Special Petroleum Tax “is an insult” to Ghanaians.

Parliament on Thursday passed the Special Petroleum Tax Amendment Bill to slash the tax from 15%to 13% amid agitation by Labour and the Chamber of Petroleum Consumers (COPEC) over rising cost of fuel.

Chairman of Parliament's Finance Committee, Mark Assibey Yeboah, believes the reduction will bring “big relief to everybody,” as soaring petrol and diesel prices increase the cost of transportation and prices of goods.

But opposition MP for Tamale North, Alhassan Sayibu Suhuyini, says considering that the now governing New Patriotic Party (NPP), while in opposition, campaigned fiercely against what it perceived as unbearable cost fuel, the announcement on Thursday of a paltry 2% slash is a disappointment.

“What the government did [Thursday] in Parliament, I think, was an insult to the agitators and all of us who consume fuel products and were looking forward to something dramatic happening as far as the pricing is concerned,” he said on current affairs programme, PM Express , on the Joy News channel on Multi TV.

- Alhassan Sayibu Suhuyini
The 2% reduction in the SPT means that a litre of petrol sold at the pumps at GH¢4.67ps will now sell at GH¢4.51ps and a litre of diesel sold at GH¢4.67ps will go for GH¢4.48ps.

This translates to savings of about GH¢1 per gallon of fuel purchased.

However, many Ghanaians are not impressed, and Mr Suhuyini is one of them.

“Maybe for those who have the ability to consume in the thousands of gallons...they will notice the saving they will make, and that may be for those who use fuel for industrial purposes – they may appreciate that saving.

“But for the majority of us who depend on it to transport goods and transport ourselves, from one place to another, this is an insult to our pockets and our intelligence,” he told PM Express host Nana Ansah Kwao IV.

Related: NPA bows to COPEC pressure: 15% petroleum tax soon to be made ‘specific amount’

A demonstration by COPEC and the Industrial and Commercial Workers Union (ICU) against the tax and other petroleum sector levies brought to the fore need to change the SPT from a percentage of the ex-depot price to a specific amount.

The SPT was introduced by the National Democratic Congress (NDC) government in 2014 when the price of crude was failing dangerously and affecting government revenues from the sector.

The 15% SPT slapped on petroleum products, at the time, was aimed at shoring up dwindling revenues due to the falling price of crude on the international market.

However, with a stable price for crude currently, many industry players think it should be scrapped entirely -- something the current government is unwilling to do.

The industry regulator, National Petroleum Authority (NPA) admits changing the tax to a specific amount will reduce fuel prices, and the Authority’s Chief Executive revealed recently that a meeting has been held to consider the change.

- Alhassan Tampuli , NPA Chief Executive
But with the 2% reduction in the SPT, it is not clear if the government will still go ahead with the plan.

Meanwhile, Alhassan Suhuyini is certain that the governing NPP has failed Ghanaians who voted overwhelmingly for the party based on promises such as an improved economy, reduction in the price of petroleum products and a myriad of other promises.

Watch the entire show in the video below.