Fuel prices to go up if court order is obeyed- Gov't
Government is warning of a possible petroleum price hike if the National Petroleum Authority (NPA) is forced to honour a recent court order abolishing ex-refinery tax on petroleum products.
It is therefore hoping the court will grant its application for stay of execution pending an appeal against the ruling.
A statement issued by the Energy Ministry says if the court ruling is allowed to stand the price of premix fuel for example will shoot up by over 100 percent while Liquefied Petroleum Gas will rise by 57 percent.
It says Kerosene prices will see over 70 percent increase and petrol by three percent.
Two weeks ago, the court ruled in favour of NPP Parliamentary Candidate for Obuasi, Kweku Kwarteng and others who challenged the legality of the ex-refinery differential tax imposed in June 2009.
Earlier, the Ghanaian Times newspaper reported that government is considering to remove the petroleum subsidies because of the growing expenditure on fuel subsidy by the government.
According to the paper, government has accumulated a total debt of about $222 million from subsidising petroleum products this year which is becoming a burden.
The newspaper further stated a government source as saying that the decision was prompted by an estimated $45 million expected to be used in subsidizing the products for this month only.
The source spoke about a stalemate between the Ministry of Finance and Economic Planning and the Ministry of Energy as to when the increase should be implemented.
While the finance ministry is of the view that the increase must be implemented immediately in order not to derail the economy, the ministry of energy says it needs time to come out with interventions to mitigate any social and economic impact.
Explaining issues further, the source said the government went into hedging on crude in January this year to help stabilise petroleum pricing.
In another development, the Chief Executive Officer of the National Petroleum Authority, Mr Alex Mould speaking on Joy FM’s Super Morning Show explained that the ex-refinery differentials was simply a stabilizing margin that was used to subsidise the prices of LPG, kerosene, premix fuel and other products.
He said abiding by the court order would mean an immediate upward adjustment in fuel prices from four per cent to 140 per cent. He further explained that the upward adjustment which is the actual international price would eventually be passed on to consumers.
Mr Mould explained that the ex-refinery differentials was a small levy put on the ex-pump price and the money accruing from this pooled and relied on prices go up on the international market to stabilize the domestic prices of petroleum products.
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