Credible information picked up by The Chronicle from the corridors of power indicate that members of the economic management team of John Dramani Mahama's government are divided as to whether to increase the ex-pump price of petroleum products or not.
Available information indicates that the government is currently spending a whopping GHÂÂ¢150 million a month to subsidise petroleum products, which is having a heavy toll on the economy.
What has even exacerbated the situation is that 70% of fuel imported into the country is reportedly smuggled outside, especially, to neighbouring Burkina Faso, Togo and Ivory Coast, due to the cheap price of the commodity in Ghana.
At Aflao, for instance, there are reports that petroleum products are smuggled in droves almost every day through unapproved routes to Togo, but the security agencies are not doing much to stem the practice which is wreaking havoc on Ghana's economy.
In the Upper East and West regions, some of the district assemblies have imposed a ban on the sale of petroleum products during certain times of the day, as a result of the rampant smuggling of the products, especially petrol, which is raking in huge profits for the saboteurs at the expense of the economy.
These assemblies took the decision as a result of the constant shortage of the commodity, which they traced to illegal haulage across the borders. The Chronicle was told that all the available data, including the rampant smuggling of the products, have been brought to the attention of the members of the economic management team, but mustering the courage to increase the price of the product to stem the tide has become a herculean task to execute.
The usual reliable source told this reporter that whilst a section of the economic management team have argued that the subsidy on fuel has risen from GHÂÂ¢90 million to the current GHÂÂ¢150 million, just under four months, and that if the ex- pump price of the commodity was not adjusted immediately, the whole economy would tumble, others are calling for a gradual approach to the adjustment saga. The last time the National Petroleum Authority (NPA) adjusted the ex-pump price of petrol and other related products was February 2012.
Though the world market price of the product has since gone up, the government failed to pass on the increment to the consumer, resulting in the current huge debt being incurred by the government, in the form of subsidy.
The Minister of Finance, Mr. Seth Tekper, admitted in a telephone interview with The Chronicle yesterday, that the government was subsidising fuel to the tune GHÂÂ¢150 million a month.
He also admitted that the last time the ex-pump price of the commodity was adjusted was in February last year. He, however, explained that the adjustment of the ex-pump price could not be carried out due to the free fall of the local currency, the cedi, and that if any attempt had been made to increase the price at the time, the whole economy would have suffered.
Seth Tekper, who has just assumed office as Finance Minister, further told The Chronicle that figures they were getting indicated that if the commensurate adjustment was not done, the subsidy would continue to increase.
The Minister would, however, not give the exact date this increment would be effected, noting that the government was still pondering over the issue.
The former Minister for Energy and Member of Parliament (MP) for Afigya Sekyere West in the Ashanti Region, Mr. Kan Dapaah, mid last year called for the immediate withdrawal of subsidies on fuel to save the financial burden being imposed on the country.
According to him, the billions of Ghana Cedis hanging on the neck of the Tema Oil Refinery (TOR) was nothing, but the cost of subsidies on our petroleum products. Speaking at a retreat organised by the Ghana Journalists Association (GJA), and sponsored by Tullow Oil, on the theme, 'Strategic Overview of Global Oil and gas sector' for editors at Koforidua, the former Energy Minister did not understand why the government should continue to subsidise fuel for the affluent to buy into their cars, which they drive on our streets at the expense of the poor.
He noted that over 70% of cars and vehicles roaming the streets were privately owned, and that it was wrong for the poor, who also pay taxes, to continue to subsidise fuel for those who could afford realistic prices. Mr. Dapaah, who was the Chairman of the Public Accounts Committee of Parliament at the time, noted that the time had come for Ghanaians to divorce politics from petroleum products, and called on the media to be at the forefront in the fight against the ills in society and the government.
Dr. Charles Wereko-Brobby, an energy expert, has similarly expressed concern about the subsidisation of petroleum products, especially gas, which, he noted, was being abused by taxi drivers.
Also, early last year, the International Monetary Fund (IMF), which has doled out several millions of dollars to support the infrastructural development of the country, made a similar appeal to the government, when its representatives called on the late President Mills at the Castle, Osu.
But, despite all these promptings from both the IMF and politicians in the country, the government failed to heed the call to increase the ex-pump price of the commodity, and continues to subsidise the products much to the consternation of industry players.
It is, however, not known whether President Mahama would touch on the issue during his state of the nation address to Parliament later this month or not. This reporter was told that the hotheads in government were pushing for the increment to save the economy, but the answer now lies with Seth Tekper, as to whether the increment should be carried out or not.