The myth of government subsidy must end - Wereko-Brobby
In a letter dated February 15, 2013 and addressed to the Chief Executive Officer of the NPA, Dr Wereko-Brobbey declared a relentless pursuit of the matter until the NPA provided, “convincing and satisfactory answers and explanations to the people of Ghana” regarding the need for fuel price increases.
“This relentless pursuit will include resorting to the courts if that is what it will take for you to account to the people, in whose name and on whose behalf governance is exercised,” he wrote in the letter, a copy of which the Daily Graphic has laid hands on.
But the NPA seems to have trashed Dr Wereko-Brobbey’s letter even before the ink of his signature could dry as it announced an increase in the price of petroleum products, barely 24 hours after the former Chief Executive Officer of the Volta River Authority (VRA) had written to it to demand answers to some pertinent questions about the petroleum price buildup.
Establishing his credential as one of the three original architects of the petroleum price buildup methodology, Dr Wereko-Brobbey said he did not support the use of other public funds to subsidise the price of petroleum products.
Rather, he said he held fast to the three pillars on which the petroleum price buildup was planted, including the need to recover the full cost of importing, freighting and refining the crude oil and the landed cost of petroleum products used in the country.
Second, he noted the need to pay the cost of those who stored and transported the products in bulk and those who sold the products. Third, there was the need to ask consumers to contribute to the search for and use of sustainable energy resources.
Dr Wereko-Brobbey, who signed the letter as a Policy Analyst of the Ghana Institute for Public Policy Options (GIPPO), said added to the three pillars of the petroleum price buildup were special levies introduced for the specific purposes of achieving social interventions such as support for kerosene, pre-mix fuels and LPG.
“These levies, called cross subsidy levies, are paid for by buyers of petroleum products and not sourced from the specific taxes on petroleum products or other pockets within the Consolidated Fund,” he contended.
Dr Wereko-Brobbey said in principle, as long as the three pillars were not shaken by expediency or lack of courage, there should never be any need for any government to divert precious resources from meeting the basic developmental needs, such as good drinking water, free and quality basic education and health.
“By the same token, as long as the sum total of the special levies collected for social intervention in fuel prices are not exceeded by the cost of doing those interventions, there should also be no need to take resources from other pockets of the Consolidated Fund to subsidise the price of fuels,” he stated.
Raising some critical questions on the purported government subsidy, Dr Wereko-Brobbey, nicknamed ‘Tarzan’, asked whether at any time since the last price increase was announced, there had been breaches of any of the three pillars of the petroleum price buildup in respect of failure to meet the full cost (under recovering the ex-refinery price), underpaying those who store and distribute the fuel, and foregoing any taxes or special levies?
He said if the answer to the foregoing was yes, then there was the need to find out when they occurred and the specific costs that accrued as losses to the affected parties.
“What have been the total amount of revenues that have accrued from the special levies imposed on gasoline, LPG, pre-mix fuel to build up the Cross-Subsidisation Fund since the last increase of prices, and how much of the Cross-Subsidisation money has been spent on supporting the prices of social fuels since the last increases in prices?” he further demanded.
Dr Wereko-Brobbey also wanted to know whether there had been a surplus or under expenditure from the Cross-Subsidy Fund and where the surplus had been put or the source of paying the under expenditure.
He also wanted to know about the status of the NPA’s compliance with the High Court ruling that it must refund monies it had collected, without parliamentary approval to the national coffers, and if the NPA had complied, how much it paid back into the Consolidated Fund and also show the evidence of the payment in publicly accessible sources.
“If the NPA has not paid back the money as ordered by the court, where is the money now and what are you doing or have been doing with it,” he further demanded answers from the NPA boss.
Dr Wereko-Brobbey also questioned the sense or logic in importing LPG at full cost price and subsidising it only for it to become a competitor transportation fuel to gasoline and gas oil from whose refining process LPG was a by-product not produced enough locally.
On the way forward, he stressed the need to address the persistent failure of successive governments to respect and adhere to the letter and spirit of the petroleum price buildup over the past 25 years, especially since the onset of partisan democratic governance in 1993.
“Time and again, and in spite of professed commitment to its principles, buttressed by specific legislation such as the formula and operating mechanisms for the buildup, all governments have resorted to expedient jettisoning of the mechanism for short-sighted and short-lived political gains that the consumer ultimately has been forced to cough up to pay for the resulting damages to the national economy,” he remarked.
Dr Wereko-Brobbey also called for the review and amendment of all the policies and measures for social pricing interventions in the petroleum sector to ensure that there was coherence and consistency, and that they achieve their intended purpose.
“I concede that you and your colleagues at the NPA can do little about the follies of governments. However, as the mouthpieces of government when it comes to dealing with the public and selling the unpalatable and indigestible news of increases to the public, I believe it is part of your cardinal duty to advise and caution government on these matters, and yes, be prepared to forego the few amenities of the job by resigning your position on a matter of principle and protecting your professional integrity,” he advised the NPA boss.
Story by Kofi Yeboah
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