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Feature Article of Tuesday, 3 January 2012

Columnist: Dapaa, Gyasi Kwabena

VEEP lies to Ghanaians about oil monies!

By Gyasi Kwabena Dapaa

In an address to Ghanaians, Vice President John Mahama explains that continuing to subsidize oil would cost $800million GHC given that they had budgeted for (or betted on) $90/barrel but the current market price has disappointingly turned out to be $107/barrel. This is what the VEEP says if you want to listen:

http://newsaudio.myjoyonline.com/pages/newsaudio/201112/228.php There are two major contradictions (or lies, to be blunt) in the VEEP’s address if you compare with what is stated in 2012 budget pasted below:

“174. Madam Speaker, it is significant to note that rising crude oil prices often create public pressure for subsidization of the prices of refined petroleum products. Government, therefore, has had to subsidize ex-pump price of petroleum products to the tune of GH¢267.61 million as at September 30, 2011. The entire under-recovery of petroleum pricing for the year is estimated to be GH¢364.94 million based on the assumption of crude oil price of US$110.23 per barrel.”

Clearly, according to the budget, we had planned on an oil price of $110/barrel and NOT $90/barrel claimed by the Vice president. This means the current market price of $107/barrel is actually favorable to our budget. The last time I checked, if you anticipated to purchase something at $110/barrel and you actually get it for $107/barrel, that is actually a pleasant surprise. Also, VEEP exaggerated liberally by claiming that it would take GHC800million to continue to subsidize oil at a current price of $107/barrel. This is Azonto mathematics because if at a price of $110/barrel, the cost of subsidies equated to GHC 370million, then at current market price of $107/barrel, the cost of subsidies should be lower than GHC370million.

We understand that Ghana may be under some external pressure (IMF or World bank perhaps) to slash her oil subsidies as a pre-requisite for continued financial support. Hence, if the VEEP had come clean about the authentic reasons for having to get rid of oil subsidies, we would have been sympathetic to it. But cooking up reasons aren’t going to cut it. The VEEP should realize that the “Bagyimi mmere”(days of ignorance) are over and Ghanaians are not going to tolerate any hoodwinking and bamboozling from politicians. Because as our elders say, “Y3n nfa nkwadaa s3m nsisi aboa kontrofi” (It doesn’t take naive trickery to deceive a monkey). More importantly, if the VEEP claims we should be expecting more infrastructure in 2012 in return for the removal of oil subsidies, he should bet his last pesewa that We would be expecting more infrastructure!

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