TUC reacts to petroleum price hike

Accra, Oct. 20, GNA - The Ghana Trades Union Congress (TUC) on Thursday urged the Government to find alternative ways of cushioning Ghanaians against any impact of soaring prices of petroleum products on the international market saying the levels of taxes on fuel should be reviewed.

In a statement signed by the Secretary-General, Kwasi Adu-Amankwa, the TUC said it was not right to pass the high prices on the international market to the local consumers as it brought severe hardship to the majority of the people.

The TUC noted that high levels of taxes on fuel prices were not consistent with the Government's poverty reduction strategy and that they must be reviewed to reflect the realities of the times. The TUC noted that taxes and levies constituted approximately 41 per cent, 27 per cent, and 15.5 per cent of the ex-pump prices of premium, diesel and kerosene, in that order.

The National Petroleum Authority cited the high crude oil price on the international market as the reason for the upward adjustment of petroleum prices.

The TUC held that when the prices of petroleum products were increased in February, August and October this year, it took Government up to October 2005 before salaries were adjusted and "even so at a meagre percentage".

There are also others, who have not had any increases in their incomes at all this year.

It pointed out that in the 2005 Budget, Government announced the deregulation of the petroleum sector but "we are now in the last quarter of the year, yet it has not released any official policy document on the planned deregulation".

The statement said: "The petroleum sector is extremely important for the growth of the economy and the well-being of the population, therefore, Government must avoid ad-hoc measures when dealing with such sector."

The statement subsequently called on the Government to present its policy on the petroleum sector that would ensure among other things that social impact assessment was done prior to any price increase.

"Government's own poverty and social impact assessment of the impact and effects of petroleum pricing in Ghana indicate that petroleum price increases depress economic activities, (affects) inflation, increase household expenditure on social services and the rural households are likely to switch from the consumption of these products."

The TUC questioned why the Government reduced corporate taxes, which were not tied to employment levels or increased productivity of enterprises enjoying the tax relief, and maintained taxes on petroleum prices.

In its estimation it did not see how the country could depend on taxes and levies on petroleum products as a major source of revenue while the situation was unstable at the international market.