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COPEC reiterates calls for review of petroleum taxes to reduce fuel prices

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The Chamber of Petroleum Consumers (COPEC) has reiterated calls for the government to remove the Price Stabilisation and Recovery Levy to avert the consistent increase in prices of petroleum products.

Prices of fuel, particularly petrol, have increased from $694/MT as of 13th September 2021 to above $720/MT as of 16th September 2021 representing a 3.7% increment.

The price of crude also increased to 3.16%, reaching $72.69 on Wednesday, while Brent Crude increased to 2.89%, reaching $75.73.

This has affected the price of fuel at the various filling stations in Ghana.

A statement from COPEC said apart from the international market prices having an impact on petroleum products, the local currency has also witnessed a further depreciation in recent times as compared to other trading currencies.

“The two key indicators, that is international market prices and foreign exchange differentials, are all likely to affect average pump prices of petroleum products by between 2% to 3% or (10p/Litre for both products) in this second pricing window of September 2021.”

“This would likely translate to reviewed figures by the various Oil Marketing Companies (OMCs) as those selling at current prices for gasoline and gasoil at GH¢6.38 could be reviewed upwards to between GH¢6.45/-GH¢6.52/L for both Gasoline and Gasoil.”

COPEC argues that the marginal increases “if left to continue would further worsen the cost of transportation, general goods and services to invariably affect all other productive sectors of the economy and economic life.”

The Chamber has thus made a number of recommendations it believes will lead to a marginal decrease in prices of petroleum products:

1 a) An immediate removal of the price stabilisation and Recovery Levy of between 14-16p/Litre for diesel and petrol.

2 b) The need for Authorities working through the Ministries of Finance and Energy to apply the already collected funds accruing to the Price Stabilization and Recovery Levy Fund to offset or stabilise the FOREX and price differentials from increasing on the price build-up.

3 Consider reviewing of the UPPF to enable the various OMCs to manage their own transportation across the country of the product which is likely to see this margin drop by at least 10p/Litre.

4 A further review downwards of other taxes such as the special petroleum tax ( SPT ) on petroleum products in the yet to be presented 2022 budget which is expected to be presented in the last quarter of 2021.

5 An immediate and a thorough review of the entire petroleum price deregulation programme with the view to limiting the overbearing influence of both taxes and forex on pump prices.

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