Prices of petroleum products have been increased by nine per cent, with effect from yesterday, May 17, the National Petroleum Authority (NPA) has announced.
With the upward review in prices, premium will now sell at GH¢3.33 per litre, instead of GH¢3.05, while a litre of diesel, which was sold at GH¢2.97, is now GH¢3.24.
Kerosene also sees the same percentage increase from the previous GH¢2.92 per litre to GH¢3.19 per litre, while the price of Liquefied Petroleum Gas (LPG) has been increased from GH¢2.64 per kg to GH¢2.88 per kg.
However, the price of premix fuel of GH¢1.57 remains the same.
NPA explains
In an interview with the Daily Graphic, the Chief Executive Officer of the NPA, Mr Moses Asaga, said the authority had held a review meeting at the weekend to examine recent occurrences on the world market that had affected the prices of petroleum products.
At the end of the meeting, Mr Asaga, said Freight On Board (FOB) prices of petroleum products which had seen a steady rise since mid-February this year had necessitated the local upward adjustment which was to ensure full cost recovery.
He said between mid-February and now, the price of petrol had increased by 37 per cent, while that of diesel had shot up by 26 per cent, with LPG inching up to about 43 per cent.
Another factor that had necessitated the increment, Mr Asaga said, was the depreciation of the cedi against the dollar.
The NPA, he said, had been compelled to pass on the cost to consumers because if that was not done, the sector would suffer liquidity challenges that might create problems for the supply of petroleum products.
The situation, he explained, had been further compounded by the fact that all the banks that used to provide support for the Bulk Oil Distributing Companies (BDCs) had withdrawn their support.
For that reason, he said, the adjustment was necessary in order to bolster the confidence of the banks that debt was not being accumulated.
Hedging
Earlier this year, the NPA announced plans to implement a hedge policy for petroleum products from Sunday, March 1, 2015 as a move to insulate Ghanaians against having to pay more in the event that world prices of those products escalated.
A hedge is like an insurance policy that insulates consumers against paying prevailing prices when prices move from a previous low rate to a high one.
But checks by the Daily Graphic from sources at the Bank of Ghana and the Ministry of Finance indicated that the plan had not been implemented.
No reason has so far been given for the failure to go ahead with the planned hedging.
Reactions
Meanwhile, the flag bearer of the New Patriotic Party (NPP), Nana Addo Dankwa Akufo-Addo, has described the decision to increase the prices of petroleum products, in the midst of the ongoing crippling power crisis, as the mark of an insensitive government.
In a related development, the Ghana Private Road Transport Union (GPRTU) has given indication that it will soon meet to agree on new fares to be charged by its members.
Meanwhile, the increment is said to have affected the sale of petroleum products at some fuel filling stations, reports Adwoa Amofa Osei.
At the Total Filling Station at the Obetsebi-Lamptey Circle in Accra, the Manager, Mr Joseph Asante, said the increment had affected sales.
According to him, some customers who did not know about the increment left the station in anger when they were told about it, without buying.
“Most of the customers who came in today were taken by surprise by the new prices and so they drove away in protest,” he said.
At the Total Filling Station at Kaneshie, an attendant who refused to give his name out told the Daily Graphic that sales had been slow since the new prices were effected in the morning.
In an interview, Mr Akwasi Appiah, a driver at the Neoplan Station at Circle, said the fuel price increment would have a negative effect on them unless new rates were announced.
He said, already, passengers were complaining of fares being high and so the increment would adversely affect patronage.
A taxi driver at the Las Pamas Taxi Station, Circle, Mr Kwesi Donkor, said it was unfair for the NPA to refuse to reduce prices when they went down on the world market but quickly increase them when prices went up marginally.
The last increment
The last time that the NPA increased fuel prices was November 19, 2014, following the imposition of a 17.5 per cent tax on petroleum products which resulted in a three per cent increase in petroleum prices.
The Minister of Finance, Mr Seth Terkper, had submitted a bill to Parliament requesting the approval of a special petroleum tax policy which would see the introduction of 17.5 per cent VAT on petroleum products.
Parliament approved the 17.5 per cent Special Petroleum Tax bill.
The last ex-pump price review was also made on January 1, 2015 which was a 10 per cent reduction.
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