Car owners and motorists were overcharged by up to L$131.26 million (approximately US$721,000) at the fuel pump over three weeks earlier this year because the government set gasoline and diesel prices based on an outdated exchange rate, according to two Senate committees.
In a joint report, the Senate Committee on Public Corporations and the Committee on Public Accounts, Expenditures, and Audits stated that the Ministry of Commerce and the Liberia Petroleum Refining Company continued using the Feb. 13 rate of L$187 to US$1 from March 14 to April 3, even though the Central Bank of Liberia's daily rate had dropped to between L$184.39 and L$185.13. Multiplying this rate across more than 10 million gallons of fuel lifted for public sale during that period, the committees said, it became what they called a hidden exchange rate tax, imposed without a legislative vote and almost entirely borne by Liberians who earn, save, and spend in Liberian dollars.
The committees estimate the total to be between L$123.71 million and L$131.26 million, or roughly US$680,000 to US$721,000 at the current exchange rate of about L$182 to US$1.
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Fuel pump prices in Liberia are determined by the U.S. dollar base cost per gallon, converted using an exchange rate established in the price calculation. The report's main finding is that the exchange rate, not the actual fuel cost, influenced the price. World market costs did not increase during this period. The base cost remained at L$1,080 per gallon for diesel and L$1,225 for gasoline according to the committees' schedule. The only issue was the exchange rate, and it was incorrect in one direction.
On diesel, the report found the correct pump price should have fallen between L$1,065.77 and L$1,099.40 a gallon (about US$5.86 to US$6.04). Consumers instead paid a rate-driven premium of L$13.50 to L$14.23 (roughly 7 to 8 U.S. cents) on every gallon. Against 5,328,500 gallons of diesel lifted for public sale, excluding volumes lifted by Bea Mountain Mining Corporation, that came to between L$71.93 million and L$75.82 million (about US$395,000 to US$417,000).
On gasoline, the correct price ranged from L$1,213.33 to L$1,266.29 per gallon (about US$6.67 to US$6.96). The premium ran from L$10.90 to L$11.67 a gallon (roughly 6 U.S. cents) across 4,750,000 gallons, or between L$51.78 million and L$55.43 million (about US$285,000 to US$305,000).
The figures exclude jet fuel and heavy fuel oil, meaning the committees' estimate covers only the fuel sold to the ordinary market and understates the full value of the mispricing.
The committees drew their numbers from the LPRC importer lifting report and a price memorandum issued by the Ministry of Commerce and LPRC.
What gives the finding its political edge is the report's characterization of who paid. The committees called the overcharge "a poor man tax," a regressive burden falling on households that transact in Liberian dollars, while importers, whose costs are denominated in U.S. dollars, were made whole at a rate more favorable than the market rate. The report said income was transferred from low-income households to importers and to government revenue without legislative approval.
That transfer didn't stop at the pump. Commercial transport operators who bought diesel at the inflated rate passed the cost on to passengers in fares, which is why the committees singled out transport unions as candidates for any refund.
The mismatch, it said, distorts fuel prices, undermines public confidence in the pricing mechanism, and reveals a structural weakness in Liberia's fuel pricing governance framework. Nothing in the price build-up compelled Commerce or LPRC to act when the Central Bank moved. The February rate was simply carried over into the formula.
The committees recommended that the exchange rate used by the Ministry of Commerce, LPRC, and the Central Bank be aligned in real time, so that pump prices reflect actual market conditions rather than a rate frozen weeks earlier.
They advanced further on the money already collected, advising the government to consider a compensatory measure for the public. Under a direct refund mechanism, the committees proposed a temporary cut in pump prices equal to the overcharge, a credit applied against future price increases, or a targeted refund to the commercial transport unions that passed the cost to passengers. If a direct refund proves administratively difficult, the report suggests relief instead of a refund through a temporary reduction in the goods and services tax on fuel, a temporary suspension or reduction of storage or port fees included in the price build-up, or a fixed per-gallon rebate applied to the next pricing cycle.
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Either approach, the committees wrote, acknowledges the burden placed on Liberian-dollar earners and provides a fair and transparent remedy.
The report includes signature lines for 11 members of the Public Accounts, Expenditures and Audits Committee, chaired by Sen. Amara M. Konneh, with Sen. Gbehzohngar Milton Findley as co-chair, and for seven members of the Public Corporations Committee, chaired by Sen. J. Emmanuel Nuquay, with Sen. Augustine S. Chea as co-chair. Among the listed members are Sen. Abraham Darius Dillon, Sen. Edwin Melvin Snowe, Sen. Nathaniel F. McGill, Sen. Prince K. Moye, Sen. Saah H. Joseph, and Sen. Bill Twehway.
