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Gov’t must increase petroleum stock to absorb price shocks

Emmanuel Armah Kofi Buah, Former Petroleum Minister
Emmanuel Armah Kofi Buah, Former Petroleum Minister

Former Minister of Energy and Petroleum, Emmanuel Armah Kofi Buah has told Citi Business News that government needs to grow the country’s stock of reserve petroleum products, to help prevent the frequent increases in the price consumers pay at the pumps.

He also reiterated his call for the scrapping of the Special Petroleum Tax, to bring some relief to Ghanaians.

His comments come in the wake of a marginal rise in the prices of petroleum products for the first two weeks (1st to 15th) of February 2018, following an earlier increase in the second pricing window in January 2018.

Speaking on the sidelines of the State of the Nation Address by President Akufo-Addo in parliament, Mr. Buah said it was time government took measures to reduce the price of fuel at the pumps.

“The NPP government has scrapped one of the most critical strategies the NDC used in managing prices of petroleum products. What we did was that we got BOST to import strategic stocks at lower prices at lower prices. We then released these stocks whenever prices start going up like they’re doing today. These are the kind of strategies government needs to consider to better manage the price of petroleum products at the pumps, in addition to the outright scrapping of the Special Petroleum Tax.”

The Ellembelle MP’s call for the removal of the special petroleum tax follows a protest by the Chamber of Petroleum Consumers (COPEC), and the Industrial and Commercial Workers Union (ICU), against the price increase of petroleum products.

Checks by Citi Business News for instance show that major oil marketing companies such as Total, GOIL and Shell have increased their prices by some 4 pesewas; to 4 cedis 67 pesewas per litre each of diesel and petrol. This is despite assurances from the NPA that prices will remain fairly stable at the pumps.

The Special Petroleum Tax initially 17.5%, was placed on petroleum products by the erstwhile NDC government in 2015.

Though the NPP government had criticized its introduction, it only reviewed it downwards by only 2.5 percent in the 2017 budget to 15%.

Meanwhile, The Chief Executive Officer of the National Petroleum Authority (NPA), Hassan Tampuli, has meanwhile indicated that, government cannot scrap or review taxes on petroleum products downward any further.

According to him, the taxes have been incorporated into government’s revenue projections for the year and any attempt to scrap any of them could spell doom for the current revenue structure.

By: Bobbie Osei/citibusinessnews.com/Ghana

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