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Ghana’s Premix fuel subsidy fails to improve Fishing communities’ welfare – CEMSE

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Ghana's Premix fuel subsidy fails to improve Fishing communities' welfare - CEMSE

Ghana's Premix fuel subsidy fails to improve Fishing communities' welfare - CEMSE

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The Centre for Environmental Management and Sustainable Energy (CEMSE) has called on government to scrap the premix fuel subsidy, citing its ineffectiveness in achieving its intended purpose. Despite being the only subsidized fuel product in Ghana since 2015, the premix fuel subsidy has failed to improve the welfare of fisherfolk.

The government’s intention behind maintaining the premix subsidy was to support the fisheries sector’s growth and reduce production costs for fishing. However, the subsidy has been marred by challenges, including hoarding, diversion, and sale above subsidized prices.

According to the Centre, the premix fuel subsidy has cost the government approximately GHc1.4 billion from 2014 to 2022, with an annual average cost of GHc163 million. The subsidy regime is projected to increase from GHc802 million to GHc1.074 billion between 2023 and 2026, representing a 33% increment.

CEMSE argues that the premix fuel subsidy is unsustainable and has not significantly improved the welfare of fishing communities. Instead, it has enriched cartels and political cronies who hoard and sell the product above subsidized prices.

The Centre for Environmental Management and Sustainable Energy recommends abolishing the premix fuel subsidy and exploring alternative measures, such as output subsidies, to improve the income of fishing communities.

Tags: Centre for Environmental Management and Sustainable Energy (CEMSE)premix fuel

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