Reduction in fuel prices is gimmick - CJA

Accra, Aug. 3, GNA - The Committee for Joint Action (CJA) on Thursday described the recent reduction in fuel prices as a government gimmick and propaganda to hide the main facts.

Government last Friday announced a 2,000-cedi reduction in the ex-pump prices of petroleum products, following Parliament's passage of the Customs, Excise Amendment Act.

But CJA, a pressure group that had staged a series of demonstrations demanding reduction in prices of petroleum products, said the Government had short-changed Ghanaians from enjoying the full benefit of the abolition of the 15 per cent ad-valorem tax by increasing at the same time the Specific Excise Duty.

Alhaji Ahmed Ramadan, a member of the CJA, told a press conference that the abolition of the tax should have led to a reduction of 3,497.81 cedis per gallon in the ex-pump price of petrol.

According to him, the gains were wiped out by the increasing rates of Specific Excise Duty on petroleum products.

He said the Specific Excise Duty on petrol was increased from 200 cedis per litre to 718 cedis per litre; gas oil from 200 cedis per litre to 910 cedis per litre; kerosene from 100 cedis per litre to 648.75 cedis per litre and LPG from 100 cedis per kilogram to 722.46 per kilogram.

Alhaji Ramadan said realising that the massive increases in specific Excise Duty would impose additional burden on Ghanaians, the Government got Parliament to pass another bill reducing the TOR Debt Recovery Levy. This reduced the levy charged on petrol from 640 cedis per litre to 500 cedis per litre; kerosene from 640 cedis per litre to 350 cedis per litre; LPG from 640 cedis per kilogram to 500 cedis per kilogram and gas oil from 640 cedis per litre to 500 cedis per litre.

Alhaji Ramadan also debunked the Government's assertion that the reduction was going to adversely impact on the country's revenue generation, saying the CJA's position was buttressed by the Finance Committee report that the decrease would have no adverse effects on Government's revenue.

Government in the 2006 Budget proposed to raise about 4.2 trillion cedis from taxes on petroleum products but with the reduction the yield would be 4.10 trillion cedis.

Alhaji Ramadan described as untenable the Government's argument that the reduction was going to force it to cut back on investment in development, saying there was no justification for such an action if the Government applied prudently the resources generated from taxes.

He said the CJA still believed that 2,000-cedi reduction in the prices of petroleum products was too small and grossly inadequate.

"The CJA is of the view that taxes on petroleum products are too high and can be further reduced to minimize the hardships inflected on Ghanaians," Alhaji Ramadan said.