A former Head of Communications at Ghana’s Ministry of Energy Edward Bawa says Ghanaians should not accept anything less than 20% reduction in fuel prices following a drastic fall in prices of crude oil.
His call follows drop in the crude oil price on the international market due to the outbreak of the deadly coronavirus which has lowered oil demand.
As at about 6pm Sunday, March 15, 2020, WTI crude was trading around US$31.73 per barrel while Brent was around US$35.44.
Energy Think Tank, Institute for Energy Security is predicting a reduction in fuel prices from between 5 and 8 percent for the second pricing window.
However, even before this happens, Edward Bawa, who is a Member of Parliament for Bongo Constituency say any reduction below 20 % will amount to insensitivity on the part of government.
Speaking in an interview with Citi FM on the sidelines of a health walk organized by the NDC Tertiary Education Institutions Network (TEIN) in Bolgatanga Edward Bawa, said, “The NPP government has increased fuel prices 24 different times. From last two weeks till now, fuel prices in terms of international crude oil prices have reduced from 70% per barrel to about 36% per barrel but they have not reduced fuel prices at the pumps. They are telling Ghanaians that the next window for fuel review is on Monday [March 16, 2020]. We are waiting to see how much they are going to reduce.”
“We are expecting nothing less than 20% reduction in fuel prices at the pumps because crude oil is a critical ingredient in determining ex-pump prices. If you have crude oil coming down from US$70 to around US$36 and the dollar has been stable because of coronavirus, you have no reason than to decrease it because if you push that into the formula, we should be getting nothing less than 20%. So the possibility of a 15% reduction in fuel prices is unacceptable,” he said.
Mr. Bawa reiterated that a 20% reduction in fuel prices will not put oil marketing companies in financial distress as the government could depend on funds from the Special Petroleum Tax to cushion the companies.
He opined that the cedi has gained relative stability due to the coronavirus outbreak and thus the NPP government should not rejoice over the stability of the cedi.
“Today the NPP sees that there has been a stability of the cedi and they talk about it but one thing they have not told Ghanaians is that, because of the coronavirus, people are no longer travelling and so there is no demand for the dollar. Let the coronavirus go away and the cedi will start falling. The prediction is that we may hit the GHS6.00 mark by the end of the year and that is a terrible performance.”
He reiterated that the NDC government was a better manager of the economy than the NPP government.