Gov’t is insensitive – TUC

Organized Labour has noted that the complete removal of subsidies on petroleum products is yet another display of political insensitivity on the part of government to the plight of the people of Ghana, especially workers, who are reeling under a myriad of economic and social problems.

“We have stated in the past that petroleum subsidies have formed part of governments’ efforts to reduce the economic hardship that Ghanaians face, especially hardships that emanate from the vagaries of the international oil market but also from domestic policy failures. We believe strongly that any government that removes these subsidies in the face of these challenges and without implementing other measures that cushion the citizenry is insensitive,” a press statement issued by the organisation yesterday in Accra and signed by Kofi Asamoah, Secretary General of TUC, said.

“In our last statement on fuel pricing in Ghana, we drew government’s attention to the corrupt and shady deals in the petroleum industry. We mentioned the secrecy in all transactions in the industry and the fact there are too many players in the industry who are not adding any value but who are making huge profits at the expense of Ghanaians.

“The sheer number of the players, coupled with the secrecy in the industry, has resulted in a situation whereby petroleum products have six different taxes and five different margins in their prices in addition to the ex-refinery price.

The recent high court order ruling for the NPA to remove the so-called “ex-refinery differential” which the NPA had illegally imposed on Ghanaians supports this fact.”

The TUC said that it called on government to address these challenges but unfortunately, subsidy removal was prioritized over corrupt and shady deals that had characterized the petroleum industry in Ghana.

“The very subsidies that lessen the burden Ghanaians face from the cartel arrangements in the petroleum industry has been cut off leaving the cartel so that the privileged few can continue their loot. By this, government has elected to be on the side of the rich and powerful who are profiting from a corrupt system leaving the weak and the poor to their fate.

Government voted a whopping GH¢794,590,650 for subsidies on petroleum products in the 2013 Budget.

“The question we ask is: how is that amount going to be used? Is this amount going to be used to fund the 20 percent reduction in aviation fuel? It is ironic that government finds it necessary to reduce fuel for the aviation industry but finds it offensive and inefficient to do same for ordinary Ghanaians.

“Like many other things in the petroleum industry the rationale for the aviation fuel price reduction is unclear. We are being told that government wants to encourage more airlines to use our airports and also to reduce the airfares. But we know that as much as 65 percent of airfares for the Accra to London route, for example, can be attributed to taxes, fees and carrier charges and not fuel prices. How then can the fuel price reduction lead to a reduction in airfares?”

The National Petroleum Authority (NPA) recently increased the prices of petroleum products for the second time this year.

In a statement issued by the NPA, the ex-pump price of premium (petrol) was increased by three percent, which is now selling at GH¢9.50 per gallon.

For gas oil, the increase was two percent.

By these increases, the NPA has equalized the prices of the two products – premium and gas oil.