Withdraw nuisance, insensitive margins on petroleum products – IES to gov’t

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The burden of Ghanaians will be worsened if government fails to withdraw its decision to increase margins on some petroleum products, Institute for Energy Security (IES), has warned.

The think-tank  in a statement, described the decision by the National Petroleum Authority (NPA), which saw GHp3 per litre added on all liquid products except for premix fuel, MGO foreign, gasoil mines, gasoil rig, plus an addition of GHp3 per kilograms on LPG, as the Unified Petroleum Price Fund (UPPF) Margin, as nuisance and insensitive to the plight of Ghanaians.

The directive  which took effect May 1, 2021, additionally increased the Primary Distribution Margin (PDM) to GHp30 per litre of petrol, diesel and kerosene, while the Fuel Marking Scheme has seen an increment of up to 167% from GHp3.00 per litre to GHp8.00 per litre for all liquid products.

The BOST Margin has also recorded an increment of 100percent from GHp6 to GHp12 per litre. The new increase for BOST is coming on the back of an initial 100 percent increase, from GHp3 to GHp6 per litre barely 11months ago.

However, IES said the upward amended prices, along with recent Sanitation and Pollution tax, will increase the burden on Ghanaians who are already suffering from the economic downturn caused by the pandemic.

“These amendments in margins comes to add to the introduction of the Sanitation and Pollution Levy (SPL) of GHp20 per litre of product, and the addition of GHp10 per litre on the Energy Sector Recovery Levy (ESRL).

The IES finds these new amendments in the various margins as nuisance and insensitive to the Ghanaian petroleum consumer, particularly as the impact of the Covid-19 pandemic is still felt by the majority of Ghanaians. The consumer is already burdened with several taxes, in the face of job losses, salary cuts, and collapse of businesses et cetera; following the pandemic. It is therefore inappropriate for government to lay more burdens on Ghanaians through the amendments in fuel margins,” its Executive Director, Nana Amoasi VII said in a statement to the B&FT.

It added that there cannot be any justification for the hikes. For instance, it said the BOST Margin and the PDM goes to BOST, yet BOST has not been able to even properly justify the GHp3 per litre increase given it last year: “The company is still under performing, as it was the year before. Not much has changed.”

“It must be noted that the continuous increases in levies, taxes and margins on petroleum products is one of the key reasons for Oil Marketing Companies (OMCs) deciding to evade tax payments, and rather smuggle their products, just to maximize their market share. This eventually leave the very few tax compliant OMCs to suffer.

This action by government, through the National Petroleum Authority can best be described as miscalculated, insensitive, careless and inconsiderate, looking at the times the country is going through,” it argued.

It therefore wants the government and NPA to, as a matter of urgency, withdraw the increased levies on the UPPF Margin, PDM, FMM and the BOST Margin, to alleviate the burden on Ghanaians, warning that failure to do so could make them counter-productive

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