The Head of Economic Regulation at the National Petroleum Authority, NPA, Mr. Abass Ibrahim Tasunti, has stated the government of Ghana can only subsidize petroleum products if it has the ability to do so despite the hikes in petrol prices in the country.
“Subsidy in itself is not really a good thing; but because you the consumer, you’re only interested in the cheaper prices, but you forget that if the price is cheaper and the product is not available, you will not like that.”
He said that “for us, if the government wants to subsidize, the NPA as a regulator cannot say it would not allow the subsidy to pass, but it is for the government to analyze or assess its capacity to subsidize, but you must have the money before you can subsidize so that we don’t go back to the issue where you have subsidized, but there’s no money, and there’s a shortage”.
He further explained the NPA could only advise the government when it realizes prices are rising to use the Price Stabilization and Recovery Levy to cushion consumers, which the authority did last year.
Giving a presentation on the Price Formula in Ghana during a day’s capacity-building training for Journalists in the northern region on Monday (June 13, 2022), Mr Tasunti said Nigerian as an OPEC country, when they restructured their petroleum industry last year, decided to scrap subsidies on petrol by June this year.
“Why is Nigeria scraping subsidy on fuel? Most countries in the world want to scrap subsidies on fuel – it is not an easy decision to scrap subsidies on fuel, but it is very good for an economy.
About 70% of vehicles in Nigeria run on petrol; in Ghana, we consume more diesel than petrol, but in Nigeria, it is the other way round because everybody is using the fuel that is subsidized, but because Nigeria produces a lot more crude oil than Ghana does, that is why they’re able to use the revenue they generate from the crude oil export to subsidize the petrol prices for consumers and even that they say they want to scrap the subsidy because they aren’t able to afford the subsidy” he explained.
BoG intervention
Meanwhile, the NPA Head of Economic Regulation has said the Bank of Ghana is organizing a special exchange rate options for the oil industry, asserting it used not to happen until three months ago so that the rate at which the oil industry gets the dollar becomes predictable in order to help stabilize the price for the public.
For his part, the NPA Head of Quality Assurance, Saeed Ubeidalah Kutia, gave an assurance that the authority will continue to put in quality control measures along the value chain to guarantee the integrity of petroleum products in the country.
The National Petroleum Authority has also urged consumers to report issues of fuel adulteration within 48hours for swift investigations and redress.