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The Chamber of Petroleum Consumers (COPEC) and the Institute of Energy Studies (IES) have called on the government of President Nana Akufo-Addo to immediately withdraw the killer margins on petroleum products in the country.
Head of Research at the Chamber of Petroleum Consumers, Benjamin Nsiah says Ghanaians will wallow in abject poverty if the increment in fuel taxes is not overturned.
According to him, because petroleum products are infinite and affect the prices of goods and services, it will not be advisable for their prices to be increased, especially at a time where the country is rebounding from the adverse effects of COVID-19 on businesses and the economy.
“Gov’t has seen that petroleum products are infinite and no matter how much they increase their (Petroleum Products) prices, Ghanaians will still buy them”, he said.
Agreeing petroleum products are infinite, Benjamin argues that a spike in price has a ripple effect on the country’s economy.
“When this happens, the trotro driver will increase lorry fares, traders will also increase the price of their goods. The ordinary Ghanaian will now suffer more because they will pay more for the same product or pay more for less”.
For Benjamin, if the government refuses to withdraw these taxes, “then it is their plan to force Ghanaians into poverty. But if gov’t truly doesn’t want to increase poverty amongst Ghanaians, then the 17 pesewas unilateral cumulative increase by the NPA to the already neck-breaking 30p/litre should be removed. We are now emerging from the effects of COVID-19 and if taxes are increased, there will be a problem”.
On his authority, the country cannot bring back the economy by forcing its citizens into poverty. He believes the Ghanaian economy can only rebound when the country finds ways to increase production.
Suggesting other ways government can reduce the tax burden on the citizenry in an interview on Accra based Happy FM, Benjamin Nsiah said, “The government needs to widen the tax net and make sure that every Ghanaian pay their taxes. Through technology and other means, the government can also close loopholes through which some unscrupulous people evade taxes”.
The Chamber of Petroleum Consumers, Ghana has predicted that the country is on the verge of being hit with another astronomical increase in the cost of fuel at the pumps effective 1st May 2021.
The Institute for Energy Security (IES) also in a statement has asked government and the National Petroleum Authority (NPA) to immediately withdraw the increased levies on some margins in the Price Build-Up (PUB) of petroleum products.
The amended margins include the BOST Margin, the Primary Distribution Margin (PDM), Fuel Marking Margin (FMM) and the Unified Petroleum Price Fund (UPPF) Margin.
A statement issued by IES and signed by its Research Analyst, Fritz Moses indicated that the new increases which took effect from May 1 2021 would burden consumers.
“The amended margins were made available to the various Petroleum Service Providers (PSPs) on the 29th of April 2021, at the end of the April Second Pricing Window,” the statement further noted.
The IES explained that “for the UPPF Margin, an addition of GHp30.00 per litre has been added on all products except for the Premix Fuel including an addition of GHp30.00 per kilograms on LPG. The PDM also saw an addition of GHp30.00 per litre of Petrol, Diesel and Kerosene. For the MM, a new addition of GHp50.00 was added on all their products. The BOST Margin, was increased by 100% from GHp6.00 to GHp12.00.
This comes on the back of the introduction of the Sanitation and Pollution Levy (SPL) of 20 pesewas per litre of product and the addition of 10 pesewas on the Energy Sector Recovery Levy (ESRL)”.
According to the statement, “the IES finds these new amendments in the various Margins as a nuisance and insensitive to the Ghanaian consumer’s needs especially as the impact of the pandemic is still with majority of citizens. Already, the consumer is burdened with several taxes which, loss of employment and a reduction in salaries, all as a result of the pandemic. It will not be appropriate for government to burden Ghanaians the more with these new margins”.
The statement continued: “IES finds no justification for the increases in these Margins. The BOST Margin and the PDM goes to BOST yet, BOST has not been able to even properly justify the GHp3.00 per litre increase given it last year. The company is still the same as it was the year before and nothing has changed.
“This action by government, through the National Petroleum Authority can only be insensitive and inconsiderate looking at the times we are in”.
“Increases in levies, taxes and margins is one of the key reasons why Oil Marketing Companies (OMCs) decide to evade them the more and rather smuggle their products just to maximize their market share. This eventually leaves the very few tax compliant OMCs to suffer,” the statement further added.
Following from the increase in tax margins Ghanaians are expected to pay new fares today, the Ghana Private Road Transport Union of Ghana (GPRTU) has said.
This, the transport union said is as a result of the increment in petroleum products at various pumps in the country.
First vice-chairman of GPRTU, Emmanuel Nii Ankrah, in an interview with Rainbow Radio asked Ghanaians to expect between 20-25 per cent increment in fares.
He stated that though this is not the agreed percentage, Ghanaians need to brace themselves up for this.
“This is a proposal. It has not been accepted. But we could even get to 30% or even get it reduced. These are not the actuals. Let’s wait till tomorrow and then come out with the new fares,” Mr Ankrah stated.
As at the time of going to press, the GPRTU was in a crunch meeting with stakeholders deliberating on the percentage to add to the current fares being charged by transport operators.
Goods and services on the other hand are going to be affected.
Meaning, prices of goods and services are going to be increased.
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Meanwhile, portions of an earlier press statement signed by Executive Director of COPEC, Duncan Amoah titled ‘This Insensitive Fuel Price Increment Must Be Withdrawn Immediately’ read;
Ghanaians are on the verge of being hit with another astronomical increase in the cost of fuel at the pumps at the fuel retail outlets effective first day of May.
At the current fuel price averages of Ghc 5.40/litre, most Ghanaians have expressed misgivings about the high cost of fuel leading to an increase in costs of living and hardships and expected nothing but policy measures In helping reduce these harsh prices at the pumps.
Contrary to these expectations, the 2021 budget indicated some upward reviews on two taxes namely the Energy Sector Recovery Levy and Sanitation and Pollution levy of 20p/litre and 10p/litre respectively totalling 30 P per litre
As though these two additions which have met a lot of public resistance and misgivings were not enough, the National Petroleum Authority unilaterally has also added another 17p cumulative to the already neck-breaking 30p/litre and this has also taken effect together with the parliamentary approved 30p/litre.
What this means is that Ghanaians will have to cough up 47p/litre instead of the 30p/litre as approved from the budget.
Bost margin has been increased by the NPA by 100% from the current 6p/litre to 12p/litre, whiles UPPF has been increased from 27p to 30/litre, Primary Distribution Margin has been increased from 8p to 11p/litre and Fuels marking Margin has also been increased from 3p to 8p/litre
What this means is that the NPA unilaterally has added in excess of 3.2% on current pump prices in addition to the 5.5% new taxes from the 2021 budget. This leads to a fuel price increment of about 8.7% of current prices.
We believe the NPA is becoming a burden on Ghanaians and will need to be reigned in by the authorities from these arbitrary increases at a time as this when the harsh effects of Covid 19 on businesses and individuals are still raging.
Whiles, it is on record the country is losing billions of cedis in revenue to the fuel smuggling phenomenon and for which reason we think comprehensive efforts by the state should be directed at blocking the cartel engaged in this act to deliver the needed revenues to the state, we object to any attempts to simply continue adding taxes and unnecessary margins on the fuel price build-up which only adds to the increasing hardships on Ghanaians.
We are by this calling on authorities to reign in the NPA to immediately withdraw these new add ons as any attempts to force these unilateral increases by the NPA using the backdoor on Ghanaians will be steeply resisted.