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Opinions of Tuesday, 23 May 2006

Columnist: Kwamena, Ato

Of ?Politricks? And The Wahala Concert Party

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Friend, there?s a group of people in our country who thrive on the ignorance of the people. The more enlightened our people become the greater their fear of an erosion of their support base. In other words, it is to their political advantage that as many of our noble citizens, as possible, are left in the dark on issues. And so as political hyenas they scavenge for the vulnerable in our society and once they lay hold on a victim, they feed them with lies. They are the masters of propaganda of lies, for their foundation was solidly laid in Communism or Marxism, and so they are skilled in the ignoble art of deceiving the people. Trace their history and you?ll find that they are nothing but ?Disappointed Communists?, who only now pretend to be Democrats and Capitalists. There?s been several issues that these disappointed communists have jumped on and have tried to spin it, in order to feed the people with their propaganda of lies so that they?ll paint the country and it?s duly-elected leaders as black as possible. Hoping that, by so doing, they?ll be repositioning themselves for power.

When this country was finally facing up to reality by accepting that we are truly poor and highly-indebted, they responded: ?Hey! who says we are poor?? They we wanted us all play the ostrich, and bury our heads in the sand; away from reality. They wanted us to live in the fantasy world and pretend that we were extremely rich; meanwhile they had just finished bleeding our coffers dry. Accepting that you are poor when all facts show that you are indeed poor cannot hurt you. If anything, it will help you, as that acknowledgement and acceptance of reality is an important step in fighting that curse called poverty. But when the HIPC gains started flowing in, and cascading like springs of joy into our Nation?s coffers then in a feeding frenzy these same ?Apostles of the Fantasy World? were tripping over each other for HIPC cash, so that they could build HIPC projects in their constituencies and thereby enhance their chances of getting the people?s vote. How myopic they were!

One issue that they have consistently tried to spin and miseducate the people on is the issue of petroleum prices. Thank God, as much as they have tried, our people have seen through their chicanery, and their ulterior motives, and have exposed them for who they truly are ? liars! Why any Ghanaian would want to pretend like we produce petroleum and so we can control the price of that product without injuring the economic wellbeing of future generations beats my imagination. But this day, we must apply our own minds and exercise the ?muscles? of our cerebral matter to understand this issue of petroleum pricing and the politricks thereof. It?s not rocket science.

Crude oil, also known as petroleum, is basically high-energy hydrocarbons that Nature has stored deep down in the earth and which we drill to supply our energy needs. This product, as of yet, we do not produce in sufficient amounts to meet the local demand. In fact, the little we get from our Offshore is actually a drop in the bucket. It?s nothing. So we have to rely on the Nigerians to supply us with Crude Oil. The price of this product is mainly based on supply and demand. The higher the demand with respect to supply the higher the price. This is elementary school economics. If tomorrow the price of Crude Oil jumps to $100 per barrel, we can?t go to Abuja and tell the Nigerians that we can only pay $50 a barrel, so they must accept our offer. They?d prefer to sell it to the Togolese at World Market price than to sell it to us at a loss of 50 bucks. So let?s face the facts, the pricing of Crude Oil is beyond our control.

Once we get the Crude Oil, we have to cart and ship it to our country via Oil Tanker Ships. That is not free. There?s nothing like a free meal in this world. The Crude Oil is finally offloaded from the ships and transported to the Tema Oil Refinery (TOR) for refining. Take it from me, what you buy at the gas or filling station and pump into your car?s tank is not crude oil. Try putting crude oil into your car, and you?ll be sending it to the junkyard ? for it will not work. Hence, that Crude Oil which we import or buy from the Nigerians has to be refined or purified before you can pump into your car. Through Simple Distillation the Crude Oil is then separated into it?s basic constituents including kerosene, gasoline, jet fuel, liquefied petroleum gas (LPG), and other distillates. Depending on the sophistication of the refinery, for every barrel of Crude Oil about 60% of it is refined as Gasoline. After TOR has finished refining this crude oil into Gasoline and other products such as Kerosene, they are then shipped for sale by the Oil Marketing Companies (OMCs). The shipping from TOR to the OMCs is also not free. The OMCs like Mobil, Shell, etc then sell us the finished product ? Gasoline.

Today, the price of Crude Oil hovers around $72 per barrel. That?s how much we pay the Nigerians for each barrel of crude oil. After paying for it, we must lift the product to Ghana. Lifting it costs money. So by the time a single barrel of crude oil arrives at TOR its price is no longer $72; it?s much higher. It costs money to process or refine this barrel of crude oil at TOR. After processing it, we then have to ship the gasoline to the OMCs to be sold on the market. The OMCs would then add the State taxes to the product and then sell it to us for a profit margin of less than 6%.

Now this is where all the petroleum politricks start. The NDC is telling us through its mouthpiece, the CJA, that the government is being insensitive by increasing the price of Gasoline. They admit that there?s nothing Ghana can do about the Crude Oil prices, as we don?t produce it. Their beef is with the taxes on the product. There are 11 different taxes on Gasoline. Yeah, you heard me right, eleven! Of these 11 taxes 9 was added by the NDC. The NPP added 2. When they (the NDC) were in power, they saw the need to add 9 taxes to Gasoline. But as soon as they were kicked out of power then they shouted in astonishment: ?Oh my God! Nine (9) taxes on petrol? That?s outrageous!? In power, it was ok; out of power it is too much! Let me interject here and say that none of the 9 NDC taxes have been increased a cedi! They?ve all remained unchanged since 2001.

The two taxes that were added by the NPP Administration were: TOR Debt Recovery Levy, and the Social Impact Mitigation Levy. Now, if you remember in January 2001 when the NPP came to power, Tsatsu Tsikata had almost collapsed TOR by running a huge 3 trillion cedis debt. Yeah, you heard that right three TRILLION, not billion. That TOR debt had been financed by Ghana Commercial Bank (GCB). Do you remember why the Bank of Ghana said at that time that if nothing is done, Ghana Commercial Bank would collapse? Well that was because of Tsatsu?s ?financial wizadry?.

The NPP?s solution to the imminent collapse of TOR and Ghana Commercial Bank was to let the entire country face the reality. No more ostrich games. We had to take the bull by the horn. We had to swallow a bitter pill because of the economic mismanagement of Jerry Rawlings and his NDC cult. So we were all asked to pitch in and help hold aloft the falling flag of Ghana. We had two choices: either we let TOR collapse, and whilst collapsing drag the Ghana Commercial Bank down with it, or we could face reality and foot this crazy bill that Rawlings and his NDC had left us. Kufuor thought we should foot it. And that?s the reason why we had the TOR Debt Recovery levy which is 600 cedis per liter of gasoline. One thing people tend to forget is that, with the huge interest rate of 52% that the NDC left us with in 2001 that TOR debt was increasing at an astronomic rate. It takes time for a new government to come out with its budget statement. It also takes time for a budget statement or a new policy to reach the implementation stage. So it definitely took a while before we started paying off the debts TOR had accrued, and by that time it was higher than the initial debt.

The other tax addition by the NPP ? the Social Impact Mitigation Levy ? was added to help the poor people overcome the inherent increased in cost of living that comes with an increase in the price of petroleum. The solution was to use this tax on gasoline to start a Public Transportation system ? The Metro Mass Transit Service. The Metro Mass Transit Service always charges a fare far below that of the trotros. The logic is simple: poor people do not own cars, so they don?t directly pay that tax; the rich do. But when the price of petrol is increased everyone suffers, including the poor; they now have to pay more for transportation. So why not let the rich ? those with cross-country vehicles or SUVs ? take more social responsibility by aiding the poor, through the payment of the Social Impact Mitigation Levy. When that money is used to buy more buses, it?s the poor who will ride in. So those two taxes were to the benefit of the poor. And it makes sense.

Now the NDC?s CJA are telling us they hitting the streets because petrol is too expensive and that ?the ordinary man is suffering.? They want the taxes removed. The questions we should ask the Wahala Concert Party people are: Which of the taxes do they want us to remove: the 9 that they gave us or the 2 that the NPP added to clean up their (NDC?s) own mess? If the rich are refusing to help the poor and ?the ordinary? Ghanaian by providing them with cheaper transport fares via the Metro Mass Transport, then how are demonstrations going to help ?the ordinary? Ghanaian? Aren?t they in reality using the ignorance of ?the ordinary? Ghanaian to fight for the benefit of themselves? (And isn?t it interesting that members of the ?Men of Integrity Club? are now claiming membership in the ?ordinary? Ghanaian Club too? Times have really changed!) The NDC and their CJA Concert Party are a bunch of unpatriotic and selfish citizens. They want a product directly consumed mainly by the rich to be tax-free whilst other products that the poor buy are taxed. (And I?m yet to see an ?ordinary? Ghanaian walk to a filling station to buy gasoline, because that?s what he needs to help him walk or get to his destination).

Ironically, although the CJA say that the ?ordinary? Ghanaian is suffering because of the price of petrol, their alternative to making up for the lost tax revenue on petrol if it were to be abolished is to rope in all those in the informal sector and tax them. Let me tell you, friend. There?s no ?ordinary Ghanaian? more than the woman who sells iced-water on the streets whilst carrying her 1-year old on her back. There?s no ?ordinary? Ghanaian more than the trotro mate or conductor, who shouts and sweats all day long, but barely ekes out a living. So you can?t tell me that we should hit these in the informal sector with taxes, because the pot-bellied Wahala leaders are more ?ordinary? than these Ghanaians! And you can?t tell me that that ice-water seller should be taxed whist the rich get tax relief! We are not in George Bush?s America ? where the poor are over-taxed as the rich get tax relief. No we are not!

Now the Wahala Concert Party people are going to tell you that since Kufuor came to power on January 7th 2001, the price of gasoline has increased 500%. But they won?t tell you that from 1st January 1982 ? when their Godfather came to power through the barrel of the gun ? to 1986 he increased the price of gasoline over 3000% from less than one cedis per liter in 1981 to 33 cedis per liter in 1986. So now that you know the facts, ask yourself, which of the two was more insensitive: the one who increased it by 3000% in 4 years or the one who increased it 500% in 5 years? Needless to say that, if they (the NDC) had not created a mess at TOR Ghanaians would definitely be paying less for gasoline as there wouldn?t have been any TOR Debt Recovery Levy on the price of gasoline. In fact, every Ghanaian who buys gasoline should remember each time they pay for the product that for every liter they pump, they spend 600 cedis to clear the mess that Rawlings and his Tsatsu left. Isn?t it ironic that as these innocent citizens foot the bill for Rawlings? economic mismanagement, Rawlings himself does not contribute a pesewa to clearing his mess? In fact he adds to it. Each time he moves his motorcade of cross-country vehicles it?s the same innocent Ghanaian who fills that tank for him. All that he (Rawlings) has to do after filling his tank is to send his ?errand-boy?, Victor Smith, to present the bill to the government, and it?s paid ? just like that! Until Rawlings starts paying for his own gas or petrol, he and his NDC Wahala Concert Party have no moral right to complain about fuel prices!

Another important question that the Kwesi Pratts, the Ayarigas, and their Wahala people should answer is: If today, we as a country collectively decide to remove every single tax on petrol, including the 9 that the NDC added, and tomorrow the price of Crude Oil hits $100 per barrel, what would they (the NDC and their Wahala Concert Party people) then recommend? That the cocoa farmer should foot their petrol bills for them by directly subsidizing it? And what would be their alternative to getting resources to build more tarred roads, so that they don?t get a bumpy ride as they drive in their luxury vehicles?

So you see, all the agitations about petroleum issues, is totally uncalled for. It?s an ostrich game. They don?t want to face the reality of the world today and want to bury their heads in sand, thinking that by so doing, the problems of the escalating price of oil will be gone. They?ve gone ?million miles from reality?. But is this the alternative government we want: a government that would live in a Fantasy World? Wake up! And stop day-dreaming!

Now I want to appeal to that Wahala/CJA/NDC Concert Party to come down from their high horses and quit their propaganda of lies. They have the right to demonstrate. No doubt about that. But Ghanaians are seeing them for who they are ? liars! Their Wahala demonstration is turning out to be nothing but a Keep Fit Club for the pot-bellied friends of the NDC ? it?s an opportunity for them to sweat it out walking and burn a few adipocytes. The earlier they quit this petroleum politricks and their propaganda of lies, the better the future of the generations yet unborn would be. We cannot hand to the next generation a bad economy; an economy in shambles. It would be totally immoral to do that.

The rich must pay taxes! There should be no tax relief for the rich!

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