‘Directive not to increase fares will cripple our business’

The fuel price hikes announced by the National Petroleum Authority (NPA) last Sunday have incurred the anger of some private transport operators and commercial drivers in Accra.

While many of them have expressed shock at the increment because the government failed to reduce fuel prices when crude oil prices were low, others are fuming over the decision by the Ghana Road Transport Co-ordinating Council (GRTCC) not to allow transport operators to increase fares.

While their counterparts in the private sector are in rage over the fuel price increase, the country’s public transport operators are not complaining about the new prices.

According to some private transport operators and commercial drivers the Daily Graphic randomly spoke to, although they had no option but to adhere to the directive by the GRTCC, the increase in fuel prices would further worsen the already harsh economic situation and slow down the transportation business, writes Dominic Moses Awiah.

“You do not expect businesses to remain the same if you increase fuel prices and tie our hands to prevent us from increasing fares,” the Transport Manager of VIP Transport Company, Mr Eric Botwe, said.

Background

The NPA last Sunday increased the prices of petroleum products by nine per cent.

With the upward review in prices, premium now sells at GH¢3.33 per litre, instead of GH¢3.05, while a litre of diesel, which was sold at GH¢2.97, is now GH¢3.24.

According to the NPA, recent occurrences on the world market had affected the prices of petroleum products.

The last time the NPA increased fuel prices was on November 19, 2014, following the imposition of a 17.5 per cent tax on petroleum products which resulted in a three per cent increase in petroleum prices.

The Minister of Finance, Mr Seth Terkper, had submitted a bill to Parliament requesting the approval of a special petroleum tax policy which would see the introduction of a 17.5 per cent VAT on petroleum products.

Parliament approved the 17.5 per cent Special Petroleum Tax bill.

The last ex-pump price review was also made on January 1, 2015 — a 10 per cent reduction.

Interestingly, when fuel prices went down, commercial drivers refused to reduce fares. 

VIP Transport unhappy

The VIP Transport Manager said the price increment had come at a time when the economy was undergoing numerous challenges, adding that “charging the same fares will undoubtedly affect our operations”.

Mr Botwe said although transport operators had been asked to hold on until the mid-year review of transport fares in June 2015, the increment in petroleum prices had already prepared the public’s mind for the worse.

“Ghanaians will now resort to more mobile phone calls than travelling, since it will be cheaper to make calls,” he said.

MMT

Meanwhile, the Head of Communications at the Metro Mass Transit (MMT), Ms Bernice A. Akologo, said the company was not increasing fares, reports Seth J. Bokpe.

“There is a directive from the Ministry of Transport to us to hold on,” she explained.

She said the company had a social mandate to ensure that its fares were affordable to passengers.

According to her, even if the fares were not increased, it would not affect the cost of running the company.

She, however, said the company would be monitoring the situation until it became very necessary to increase the fares. 

Officials of Intercity STC were tight-lipped on the issue. When the Daily Graphic contacted the company, its management was said to be in a meeting over the issue.

Commercial drivers

Some commercial drivers at the Neoplan Station at the Kwame Nkrumah Circle described the directive from the GRTCC as “an attempt to cripple our activities”, Phoebe Pappoe reports.

According to Mr Kofi Akwaboah, the directive was affecting his business. 

“I used to buy GH¢50 worth of fuel for the daily routine from Circle to Tema but due to the increment, I had to buy GH¢ 70 today,” he said.

From the Kaneshie Station, Ann Adjasah reports that commercial drivers said although they opposed the directive, they had no option but to abide by it.

“Transport fares go in tandem with fuel prices and there is nothing in dispute about that. I believe fares will be increased eventually,” a driver, Nana Yaw, said.