4% hikes in petroleum products: ‘Fuel price increase is IMF conditionality’

• Posted on June 17, 2015June 17, 2015
• by Nana Kwesi Coomson
• Comment

Ranking Member of the Finance Committee of Parliament Anthony Akoto Osei says the 4% hikes in petroleum products is not because of a deregulation policy but rather an IMF conditionality.

According to him the increase is part of agreements reached with the International Monetary Fund (IMF) for a review in petroleum products every two weeks.

He said the National Petroleum Authority (NPA) cannot begin a deregulation when the Legislative Instrument (LI) 2186 has not been amended.

Speaking on Peace FM’s morning show ‘Kokrokoo’, the Member of Parliament for Old Tafo said “officially deregulation has not started, it cannot start; we have not changed the law.

“The National Petroleum Authority (NPA) must come to Parliament to amend the current law before deregulation can begin”, he continued.

The Oil Marketing Companies (OMCs) announced new petroleum prices beginning Tuesday June 16, 2015.

According to the OMCs the new price is the first step towards the full implementation of the National Petroleum Authority (NPA)’s petroleum product price deregulation.

The deregulation policy is expected to allow marketers and importers of petroleum products to set their own prices and bring an end to government subsidy on the commodity.

However, Chief Executive officer of the NPA Moses Asaga says “in line with the [deregulation policy], the NPA will monitor the application of the Prescribed Petroleum Pricing Formula to ensure that all Petroleum Service Providers apply the formula in the right way and defaulters will be duly sanctioned”.

But Dr Akoto Osei says the deregulation cannot start because the “NPA has to come to parliament [for MPs] to amend the law and they have not done this. So until the law is amended deregulation cannot start”.

He said the current changes in the petroleum prices is just a reflection of some of the conditionalities contained in the IMF bailout programme.

“Under the IMF programme if crude oil prices go up on the world market or if the cedi depreciates or both, government must adjust prices within every two weeks.

“It is under the IMF programme that we agreed that there can be a bi-weekly adjustment; it could be up or down depending on these situations”, he said.

He indicated that until the LI is amended, the country will continue to experience these increases every two weeks as part of the bailout programme.

Dr Akoto Osei said it was disappointing that the NPA will begin the deregulation exercise without parliament’s approval and a proper public education about the process.

He advocated for a removal of the exploration levy and questioned why government will give the Ghana National Petroleum Corporation a “whole budget to do exploration”.

He says government must withdraw its budget to the GNPC because it is unnecessary especially when no one knows who uses the money.

Meanwhile the new prices have already taken effect at the pumps.

With an increase of 4 percent, consumers will now pay about ¢15.00 at the pumps for fuel.

-joy