General News of Thursday, 26 June 2014


Fuel shortage re-ignites subsidy debate

The shortage of fuel in major towns across the country has re-ignited the debate over fuel subsidies.

President John Mahama Wednesday instructed the Finance Ministry to release $60 million to defray the Ghc1.8 billion owed Bulk Oil Distribution Companies (BDCs).

For the Integrated Social Development Centre (ISODEC), the removal of subsidies will lead to higher fuel prices and could have undesirable effects on the economy.

The Campaign Coordinator of ISODEC, Dr. Steven Manteaw, insists it will mean higher transport cost for most workers and higher food prices, all of which adversely affect the poor.

He recalled that in 2013, government promised to use the proceeds from the removal of fuel subsidies to cushion the poor in society “but we are yet to see any such intervention.”

Dr. Manteaw suggested that government needs to take in account “why subsidies are said not to have real impact on the poor,” adding that the situation could be attributed to the unavailability of concrete statistics on Ghanaians, which prevents government and other stakeholders “form targeting the poor with subsidies and other social interventions.”

But the former National Identification Authority (NIA) Boss, Dr. William Ahadzie, disagrees.

The Social Policy Analyst said he is convinced that fuel subsidies have not achieved its purpose and thus, needs to be removed.

According to him, Ghanaians must be made to pay the full cost of petroleum products “because there are other ways of supporting groups that will experience harsh effects of such subsidy withdrawal.”

Dr. Ahadzie added that if people are not able to afford fuel, it will ease traffic congestion and people will patronize public transports.

“I still believe in mass transit. If I don’t get the fuel, I’m going to go by public transport,” he said.

He continued saying, “if there were an efficient mass transit system, consumption per capital will be much, much less.”