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Business News of Monday, 11 February 2013

Source: myjoyonline.com

NPA hints of possible increase in petroleum prices

Prices of petroleum products may be going up in the coming weeks if government decides to remove subsidies on fuel by the middle or end of this month.

Last year the state spent about 1.5 billion Ghana cedis to reduce the price of every litre consumed by users by 30 percent.

However, with the cost of subsidies expected to increase by 2.4 billion this year, government is currently contemplating doing away with this policy because it is becoming a drain on its finances.

Chief Executive of the Authority, Alex Mould explained to Joy Business why the increase has become necessary.

“There has been over 25% depreciation of the cedi. The cedi is now about 1.9 and crude oil price is about $115 so you see about 7 per cent, 8 per cent increase in crude oil, and you also see about 23, 25% increase in exchange rate.”

“But I think one of the things we need to step up the game with is to look at the policy behind the subsidy, and I think it will be very important for Ghanaians to understand, that this subsidy cannot go on, definitely we have to pay the right price for fuel.”

Joy Business has however learnt that prices could be going up between 10 and 30 percent.

But this will depend on how government decides to pass on the cost to consumers.

However with the necessary engagements with all stakeholders, like transport operators yet to take place, the increase is likely to take place by the end of this month instead of the next review which falls on Feb 16.

Meanwhile, some consumers on the streets of Accra that Joy News spoke to about the possible price hikes, were not enthused about it.

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