Director for the Institute for Energy Security (IES), Nana Amoasi VII, says calls for the government to provide subsidies for the petroleum sector will have adverse effects on the sector.
According to him, the sector which was deregulated a few years back should not be interfered with. “The deregulation has helped the petroleum sector a lot. There are records to show that deregulation, both supply and price deregulation has helped us. The downstream sector was deregulated somewhere in June 2015. Go check the price of gasoline between May and June 2015 and check the price for the same gasoline in January 2017. You will realize that it was stable for a year and a half.”
He indicated that the stability within the period pointed out the fact that a deregulated market results in a competitive market where players have to juggle to ensure they have a fair share of the market by setting a fair price for consumers.
Nana Amoasi VII, revealed subsidies have over the years contributed to the energy sector debt. “Even ESLA has not been able to cure this and we still have a high debt sitting there. It is not an area we can play with at this time.”
To him, the call for government subsidies is one from well-meaning Ghanaians who want to see some form of cushioning but assert this as the wrong alternative.
Comparing the price of fuel in Ghana to other African countries, he disclosed that within the same 6 month period, the prices of gasoline in Egypt, South Africa and Kenya have not gone up beyond 14 percent, 32 percent and 20 percent respectively. “But Ghana’s has exceeded 64 percent. These countries all import petroleum products so how do they keep their prices that stable?”
Suggesting ways the prices of fuel can be stabilized he called for the suspension of the price stabilization and recovery levy. Beyond the suspension, he argues money from the stabilization fund should be used to cushion Oil Marketing Companies (OMCs). “We have the money sitting there and we need to use some of it to offset costs of the OMCs,” he shared with Samuel Eshun on the Happy Morning Show.
The Director of the energy think tank also called on the government to ensure prudent management of the local currency. “If we can manage our local currency, the international price hits will not affect us so much and the price builds up.”
The Institute of Energy Security (IES), has indicated that the country could experience a fuel shortage in the coming days.
Executive Director of IES, Nana Amoasi VII, said the shortage will be influenced by the depreciation of the cedi and the increase in oil prices on the international market.
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