Commuters to pay more as fuel prices go up
The Ghana Private Road Transport Union (GPRTU) is set to increase transport fares as fuel prices go up this early January.
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The National Chairman of the GPRTU, Mr Kwame Kumah, said the union would discuss the margin of increment with other stakeholders before the announcement of new fares.
“They haven’t called us to tell us anything… we are resuming on Monday so I’m sure they will call us if we resume. No matter how it is, the increment will come,” he said.
The Energy Sector Levies Act, 2015
The cost of some petroleum products is to increase between 18 and 27 per cent at the pumps beginning today, Monday, January 4, 2016, following the passage of the
Energy Sector Levy, 2015 on December 23, 2015 by Parliament. The increment margin is one of the biggest in recent times.
The Act seeks to realign petroleum-related taxes by adjusting some of the levies and abolishing others. The rationalisation has cost implications on the ex-pump price of petroleum products which will be announced this month.
Using the crude oil price of $48 per barrel, with the introduction of the new levies, premium petrol is expected to go up by 5.8 per cent and gas oil by 2.90 per cent.
“If government had not introduced the recent levy, diesel would have rather gone down by 10 per cent, while petrol would have been reduced by some 5.5 per cent per litre at the pumps but the levy has triggered an increase by at least 27 per cent,” Mr Kumah was quoted as saying.
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The Chairman of the Finance Committee of Parliament, Mr James Klutse Avedzi, told the House last month that since oil prices were pegged at $48 to determine the new levies, the world price of oil had further declined.
This means that at a lower world price, the adjustment is likely to go downwards.
Background
Giving further explanation during the passage of the Act, Mr Avedzi said the energy sector currently faced several challenges which constrained its effective functioning.
Foremost among those challenges, he said, was the issue of legacy debts.
"This has been a major drain on the energy sector and the magnitude of the debt overhang continues to weigh down heavily on the performance of the sector," he said.
According to him, in the emerging gas era, there is the need to prudently coordinate energy-sector resources to underpin the transformation agenda.
He added that although there were several levies in the energy sector currently, not every one of them had reasonably achieved the original objective for which it was created.
The various energy-sector debt recovery levies, in his view, needs to be consolidated to ensure efficiency in their utilisation along the energy value chain, particularly the gas-to-power one.
He intimated that it had, therefore, become imperative to restructure, rationalise and consolidate the various levies to address the current demands of the energy sector in a comprehensive and holistic manner.
Last increment
In August 2015, the price of petrol was increased by between four and six per cent, while that of diesel went up by more than three per cent. The increment was part of a two-week price review following the full deregulation of the petroleum downstream sector.