Ghana: Deregulation Of Petroleum Sector Has Rather Increased Fuel Prices–COPEC

Executive Secretary of the Chamber of Petroleum Consumers Ghana, a petroleum advocacy group in the Republic of Ghana, Duncan Amoah, has observed that the deregulation of petroleum has rather increased the prices of fuel at the pump.

The Government of Ghana, in June 2015, introduced deregulation of the petroleum downstream sector as part of efforts to reduce the huge debts that deprived the Oil Marketing Companies (OMCs) of the needed capital for effective and sustainable business operations.

Deregulation is the method of changing an economic system or industry from intensive government regulation to a system that is accessible to all interested oil investors, which is controlled by forces of demand and supply.

Contributing to a discussion on the downstream petroleum sector on an Accra–based Joy News channel, Mr Duncan Amoah said the deregulation has resulted in a high cost of fuel, thereby, bringing hardships on Ghanaians particularly fuel consumers.

“You see, there is something that I am still contemplating whether this whole deregulation exercise is even benefitting the ordinary Ghanaian. So you have two stations, let’s say Duncan and Kudus; Duncan station sells at 5.0, Kudus sells at 6.0, a driver walks to my station and pays 5.0 for fuel; another pays 6.0 for fuel yet they are charging the same fare so where is the benefit?” he quizzed on Thursday.

He recalled that during the era of former President John Agyekum Kufuor, “crude prices sometime in 2007 did hit the roof of 120, 140” but consumers were not asked to pay GHc6 plus for petrol.

He added that the taxes during the former President’s era were reasonable too.

According to Mr Amoah, a lot of considerations did not go into the deregulation exercise, adding that the government just took its hands off the final pricing at the pumps.

“It was just rolled out because the government was tired and was choking on the legacy debt so the most immediate solution was to leave all the marketing companies. You bring your product, you set your prices, if you make losses, I don’t owe you anything,” he stated.

Duncan Amoah said forex would continue to be a problem so far as fuel importation is not managed in the country.

“Those guys would need around 400 million every single month to bring in petroleum products, they would need a dollar, equivalent. So if they are converting all of that to dollars every single month, do you think your cedi will survive? So the cedi will depreciate and when it does, a forex rate has to be done and added to your pump prices,” he explained.

Source: https://energynewsafrica.com