Friday, May 24, 2013

NPA calls for removal of petroleum subsidies

 May 10, 2013 (Centre Spread)

The National Petroleum Authority (NPA) is pushing for the removal of subsidies on all petroleum products.
According to its Chief Executive, Mr Alex Mould, the government did not pay the subsidies on time, and for that reason, it was affecting the operations of Bulk Distribution Companies (BDCs) and other stakeholders in the petroleum industry.
At a breakfast meeting with journalists in Accra, Mr Mould said, for instance, that the government was in arrears of GH¢365 million being outstanding money meant for payment to BDCs for the year 2012.
According to him, aside the GH¢365 million outstanding arrears for 2012, the government was yet to settle GH¢200 million in subsidies for January, February and March 2013.
The government currently subsidises premix, kerosene, residual fuel oil and marine gas oil for local fishermen.
However, Mr Mould indicated that subsidies on kerosene would be removed by the end of the year.
“The government should devote the millions of cedis it uses in subsidising petroleum products annually on building schools, hospitals, roads, provision of potable water, and other social intervention strategies geared towards improving the lives of Ghanaians,” Mr Mould suggested.
According to Mr Mould, it was not fair for only a portion of the population to enjoy the subsidies, adding that “there must be a level playing field for all. Without investment, we will all perish”.
Rather, he urged the government to widen the tax net and encourage more private sector participation in the petroleum industry to make it more efficient, effective and competitive.
Mr Mould explained that currently, there was no subsidy on gasoline and diesel because the price of crude oil had dropped from $105 to $100 per barrel.
“We communicate prices to the Ministry of Finance and Economic Planning (MoFEP) every two weeks. The NPA’s job is to review prices every two weeks,” and further explained that the government and other stakeholders enjoyed stability and that accounted for the NPA not publishing the prices of petroleum products every two weeks.
“The government pays the difference in prices in the form of subsidy,” Mr Mould added.
The Chief Inspector of the NPA, Mrs Esther Anku, took journalists through the mandate and operations of the NPA and how it liaised with BDCs, oil trading companies and other stakeholders to ensure regular uninterrupted supply of petroleum products for consumers.
She said there were currently 17 BDCs out of which three had final licences with the rest operating with provisional licences.

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