A Technical Advisor at the Office of the Vice President has admitted that the John Dramani Mahama government did Ghana a great service with full deregulation of the petroleum market.
Kabiru Mahama whiles speaking on Metro TV’s Good Morning Ghana programme on Tuesday, November 1 said there was no doubt that fuel prices are greatly contributing to hardship that Ghanaians are currently facing.
“It is going to be a very difficult situation for the consumer and no one is taking away that particular fact that these are difficult times and that the public will have to brace up to sail through this storm,” he submitted.
He added that the pricing regime and liberalized system of Ghana’s economic growth and development has made it virtually impossible for government to intervene in the market.
“We know that recently during the NDC government, we had to go full deregulation of the petroleum market. And even as I sit here, I think it was one of the best decisions the previous government took.”
He explained further that: “… but for that particular decision we would have been having a serious balance of payment situation in this country. Now we don’t have petroleum subsidies but we find ourselves in fiscal distress.”
He stressed that calls for subsidies to be brought back will be inimical if measures proposed are pursued.
About petroleum price deregulation
Deregulation is the removal of government controls from an industry or sector, to allow for a free and efficient market place; the lifting of government controls, and to allow for the forces of demand and supply to dictate the prices of goods and services.
The process to deregulate the pricing of petroleum products had been evolving from 2005 when the NPA was set up until June 15, 2015, when complete deregulation was achieved.
The introduction of the deregulation policy by government was also meant to reduce the huge losses incurred by BDCs and OMCs which deprived them of the needed capital to make their businesses viable.
This also compelled government to intervene with subsidies, which also affected other developmental needs.