BOST has no mandate to fix fuel prices-the Minority

Accra (Greater Accra) 10th June '99

There was a heated debate in Parliament on Tuesday over the recent increase in the prices of petroleum products in the country.

This followed a statement made in the House by Mr Albert Kan-Dapaah, the Minority Spokesman on Mines and Energy challenging the constitutionality of the increase.

While the Minority viewed the increase as illegal and unconstitutional, members of the Majority side saw it as natural.

Mr Kan-Dapaah stated that registered in December 1993, the Bulk Oil Storage and Transportation Company Limited (BOST) was to primarily provide storage and transportation facilities for bulk oil and to also manage strategic stocks.

He pointed out that since BOST's object clauses at the Registrar-General's Department, have not changed to include the fixation of petroleum prices, the company cannot arrogate to itself the power to determine petroleum prices in the country.

Mr Kan-Dapaah said, since Act 544 imposes an "ad valorem duty of 15 per cent of the ex-refinery price", of petroleum products, this places a statutory discretionary power and responsibility on somebody to determine the ex-refinery price.

"To the extent that the person or authority so empowered is not a judge or a judicial officer, Section 296 of the Constitution requires that by means of a 'Constitutional instrument or statutory instrument' regulations are published to govern the exercise of the discretionary power."

It was, therefore, the conviction of the Minority Spokesman on Mines and Energy that the constitutional arrangement for the determination of petroleum prices has not been followed, and, therefore, called for the withdrawal of the "purported increases".

Mr Kan-Dapaah agreed that, even though, the main reason for the increase was government's desire to raise more revenue from petroleum tax, it came as a shock to industry because it dislikes unexpected shocks to production costs.

"One ought to spare a thought for our beleaguered industrialists, most of whom are yet to recover from the energy crisis we brought to bear on ourselves last year."

Nana Akomea, NPP-Okaikwei South, suggested that increases in the prices of petroleum products and transport fares should always be fixed simultaneously in order to save the chaotic and terrible situations arising from misunderstandings between drivers and passengers.

Mr Hackman Owusu Agyemang, NPP-New Juaben North, said it would be dereliction of duty on the part of members of the Executive to leave the fixing of the prices of petroleum products to BOST.

Mr Agyemang described the act as a "back pass", and said it must stop somewhere.

Mr Yaw Osafo-Maafo, NPP-Akim Oda, stressed the need to manage the economy from the central point.

Mr Osafo-Maafo was of the view that the increases would have overflow effects on the macro economy.

Members from the Majority side, who defended the increases included Mr Simon Anyoa Abingya, Deputy Minister of Mines and Energy and MP for Bolgatanga, Mr Thomas Kwame Yeboah, MP for Dormaa West, Squadron Leader Clend Sowu, MP for Anlo and Mr Abuga Pele, MP for Chiana/Paga.

In their collective view, they underscored the need for de-regulating the market so that the prices could be determined by the cost of importing of crude oil.

Mr Kwame Peprah, Minister of Finance, who was incidentally in the House, said since 1997, the increase in the prices of petroleum products has been less than 10 per cent.

Mr Peprah said he did not see the Minority's point of argument because in his view, prices of commodities must be made to reflect cost.