Gov’t subsidises fuel with ‘no cash’

Government, for the second time this year, has absorbed additional costs leveled on fuel by the National Petroleum Authority (NPA) after the first one at the beginning of August.

It has for sometime now been wailing about the depletion of funds from its coffers, hence its inability to meet the numerous requests from people.

CITY & BUSINESS GUIDE learnt that the National Petroleum Authority (NPA), in its recent price review for the first half of this month, maintained prices of all petroleum products except industrial kerosene, which was increased marginally by 1.6 percent.

Yet, petrol is being subsidized by about three percent while diesel is less than 1 percent.

Domestic kerosene continues to be the most subsidized petroleum product, with government absorbing close to 42 percent of the cost followed by premix, which is subsidized by up to 19 percent.

Given Government’s announcement in recent times that the national coffers had dried up, it is unclear where it would get the money to pay off the subsidies.

It is also expected to worsen its indebtedness to bulk oil distribution companies.

In another development, the country stands to lose over GH¢680 million as a result of the loss of a container that was transporting a consignment of 34 fabricated plates, among others, meant for the construction of an LPG storage tank.

The consignment sank off the coast of South Africa as a result of bad weather, authorities at Ghana Gas have explained.

Owing to the development, Ghana Gas would not be able to commercially begin the delivery of gas from its Atuabo facility.

The contents of the container altogether cost a little over GH¢5.2 million.

Senghuang Song, the Chinese vessel, which was carrying the consignment, was reportedly involved in the accident on August 8, 2013. Another repercussion of the loss is that Ghana Gas cannot deliver its first gas after December 31, 2013 when the construction of the gas facility is expected to be completed.

Authorities of Ghana Gas told journalists that over the three-month period that Ghana Gas fails to produce gas, VRA could shed over GH¢270 million in addition to over GH¢140 million.

Ghana Gas indicated that since the consignment was insured, the insurers would replace the damaged equipment.