Former Finance Minister Dr. Mohammed Amin Adam says the government’s GH¢2 relief on diesel has been largely cancelled out by new levies and a weakening cedi. He described it as a temporary measure that is hurting the petroleum sector.
In a post on rising fuel prices, the Karaga MP said the relief was “quasi-fiscal.” He argued that it only cut margins for the Bulk Oil Storage and Transportation Company (BOST) and the Unified Petroleum Price Fund (UPPF), which weakens “petroleum sector resilience.”
According to Dr. Amin Adam, half of the relief has already been neutralised by a GH¢1 per litre levy the government imposed on fuel. More of it, he said, has been absorbed by recent increases in levies on fuel oil, which have raised costs for industries and power producers.
He added that the cedi’s 12 percent depreciation so far this year has further reduced the effect of the relief.
“These are the reasons fuel prices are still very high in spite of the temporary relief,” he wrote.
Dr. Amin Adam contrasted the measure with what he described as the NPP’s “better record of providing relief” during periods of rising fuel prices. He listed the abolition of the excise tax on fuel and the reduction of the Special Petroleum Tax from 17.5 percent to 15 percent and later to 13 percent. He also cited its conversion from an ad valorem tax to a specific tax, and the zero-rating of the Price Stabilisation and Recovery Levy for an extended period.
He singled out the Gold for Oil programme as “revolutionary,” claiming it brought fuel prices down from above GH¢20 to GH¢11.
According to the former minister, most of the NPP’s interventions were permanent because they were backed by legislation, and the cost was absorbed by the budget rather than by the petroleum sector’s institutions.
