19 February 2013

Ghana: More Condemnations Greet Fuel Price Hikes

Ghanaians and civil society organization actors are still not coming into turns with the 20% increase in fuel prices announced by the National Petroleum Authority (NPA) over the weekend.

The unpopular announcement has caused more harm than good in the country. The increase in the fuel prices has automatically led to the hike of prices of goods and services in the West African country.

But, the Finance Minister, Seth Terkpeh maintained that government and the key stakeholders in the petroleum sector did not spring the fuel price increment on the Ghanaian consumer as a surprise.

Reacting to the fuel price hikes in Accra, Trades Union Congress (TUC), ISODEC and IMANI Ghana picked a bone with the Mahama-led government over the increase.

The newly announced increase in the price of petroleum products is causing anger around the country, with a number of public interest groups condemning government's decision.

The ISODEC Campaign Coordinator, Dr. Steve Manteaw noted that the fuel price hike was a bad idea which will have crippling effects on the Ghanaian economy.

"It is a very bad idea and I think we need to, as a country, take a look at a number of things because what we have done today will negatively impact on the economy and we are going to roll back the progress we have made in the macro economic sphere...when prices go up, workers are going to begin to agitate for wage increases and there will be a spiral impact on the rest of the economy," he stated.

Mr. Manteaw further indicated, "We have gotten to where we are today because of lack of fiscal discipline. One of the things we expected government to do was to look at its own budget because this rise in fuel prices will affect government budget as well because government depends heavily on fuel."

"We haven't really addressed the issues that militate against the exact impact therefore, government should with immediate effect look at how to mitigate the impact otherwise two or three months along the line, we are going to see a roll back of all the progress we've made in the macro economic sphere," he told Citi FM, an Accra-based radio station.

Also, the TUC added that the withdrawal of fuel subsidies would have ripple effect on the Ghanaian economy, saying that "the TUC is not against increases in the prices of petroleum products, but what we have been protesting against is the total removal of subsidies which leads to hikes in fuel prices, with ripple effects throughout the economy."

This was contained in the TUC's proposals to the government on the 2013 Budget Statement and Economic Policy which was released at the time of the withdrawal of some subsidies on petroleum products.

The TUC noted in the proposals that subsidies were an important tool for curbing the spillover effects petroleum prices had on a wide range of goods and services, saying subsidies were used by all governments, including the current one, to mitigate the negative effects of petroleum price hikes on the vast majority of Ghanaians who earned very low incomes or had no incomes at all.

It therefore, urged the government to take into account the needs of the millions of Ghanaians living in poverty.

"We would like to serve notice that the magnitude of fuel price adjustments will inform our demands for pay increase for the working people of Ghana. We need genuine consultations on fuel pricing in Ghana," it said.

Allaying the fears expressed TUC and others, Mr Terpkeh assured Ghanaians that the government was putting measures in place to alleviate the plight of the poor.

However, an Executive Member of IMANI Ghana, Bright Simon disagreed with the Finance Minister's assertion, saying the decision would not favour the poor, who will be at the receiving end of paying more, while the rich continue to enjoy subsidy on the products.

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