Big Issue: Soaring fuel prices
President Nana Addo Dankwa Akufo-Addo in his address to the nation last week Sunday assured the country of ongoing efforts to stabilise fuel prices.
He said, among other things, the government was exploring the possibility of buying low-cost fuel for distribution to oil marketers to help lower the prices.
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What should businesses and consumers do to insulate their operations and themselves from soaring prices?
Benjamin Alpha Aidoo, Communications Specialist
We are in crisis and desperate situations call for desperate measures. However, while it is laudable that we take these “desperate measures” to assuage the plight of Ghanaians in these times, we must also look at the sustainability of the solutions the government wants to bring on board.
There are a few questions that need to be asked.
Firstly, for how long will the government buy this low-cost fuel for the market and at what economic cost?
Secondly, will fuel prices revert to their high increasing trend after this stop-gap intervention?
There are obviously external market forces at play in the price hike but our particular problem is driven more by internal mismanagement.
We produce oil; why can’t the Tema Oil Refinery (TOR) process a significant quantity of that at a reduced rate for the Ghanaian market?
This stop-gap measure means that we have to go to the market with dollars to buy, which has a ripple effect on the strength of the cedi.
We are not ending this cycle anytime soon if we do not address the real problem, which is the structure of our economy.
Dr Gideon Assan, Medical Practitioner
While I do appreciate the effort of the government to stabilise fuel prices, I think the government has wasted a significant amount of time in tackling this issue. Too much time was spent on the blame game other than addressing the issue at hand.
Now, aside from just exploring the possibility of buying low-cost fuel for distribution to oil marketers, the government must appreciate the two key factors that affect the pricing of fuel and make stringent efforts to tackle each of them head-on.
The first is the foreign exchange rate and the second is the taxes and margins imposed on these petroleum prices.
Government must continue to make a conscious efforts to stop the constant depreciation of the cedi.
Again, Ghana has too many taxes on petroleum products, about eight of them. If no measures are put in place to reduce these taxes, it is common knowledge that regardless of what other measures are put in place by the government, there will be a rebound effect and the prices of fuel will keep rising.
Seidu Abudu Jnr, Hospital Administrator
I beg to differ from President Akufo-Addo’s solution to stabilising fuel prices.
Instead of exploring the possibilities of buying low-cost petroleum products for distribution to oil marketers, the government must, as a matter of urgency, bring on stream TOR to refine the crude oil given to Ghana as part of our agreement with the crude oil drilling companies in Ghana.
The government must also take steps to buy crude oil from the oil drilling companies in Ghana and refine it for use within. This will at least meet 40 per cent to 45 per cent of our needs as a country and it will help the country save on foreign exchange, which will also help stabilise the currency.
Even if the government must buy low-cost fuels for distribution to oil marketing companies, the government may have to repair diplomatic relations with Russia to enable the government to buy directly or buy Russian fuel products through third-party arrangements because Russia currently sells the cheapest oil products in the world at a rebate price of 25 per cent.
For short-term measures, the government will have to use funds accrued from the price stabilisation levy to cushion Ghanaians in the form of subsidies or use funds accrued from the windfall of crude oil sales to subsidise the price of petroleum products.
Samuel Aggrey, Executive Director, Food and Beverages Association
The speech by the President last week Sunday was long overdue. We expected him to speak on the issues and give remedies to them.
There is no cheaper fuel anywhere as they want us to believe. Petroleum taxes are man-made and they can be removed but as it is now, Ghanaians are being short-changed to cushion some few individuals at the expense of the larger populace.
All petroleum taxes can be removed at this time of our crisis to augment or alleviate this rising cost of fuel in this country.
Raymond Edem Nuworkpor, Energy Market Analyst, IES
The government must consider as a matter of priority - bringing back TOR in the shortest possible time.
This will help the country to refine its crude domestically.
The government must also put in place measures to strengthen the local currency and ensure adequate dollars are made available to importers of fuel.