The Minister of State for Government Communications, Felix Kwakye Ofosu, has announced that government will reduce some taxes and margins on fuel to help bring down prices at the pumps.
He disclosed this after an emergency Cabinet meeting held on Thursday, April 9, to assess the impact of recent global developments, particularly the US-Israeli-Iranian conflict, on Ghana’s economy.
“For a couple of days now, it has been advertised that an emergency Cabinet session was going to be held today to discuss the effects of the recent significant geopolitical developments in the shape of the US-Israeli-Iranian conflict and its impact on fuel prices,” he said.
According to Mr Kwakye Ofosu, Cabinet convened the meeting following the sharp rise in crude oil prices and finished petroleum products since the conflict began.
“As all of us are aware, since the start of the conflict, the price of crude oil and finished products have gone up significantly,” he noted, adding that the increase has affected economies around the world, especially fuel prices at the pump.
He said Cabinet reviewed the situation to understand its impact on Ghanaians and explore ways to reduce the burden, especially as recent increases could trigger higher transport fares and general price increases.
“In the last two pricing windows, we have seen some increases in fuel price and this has got to a level that, if not checked, could spill over into general price increments in transportation and other such commodities,” he stated.
Mr Kwakye Ofosu said Cabinet acknowledged that Ghana has made major economic gains over the past year, including the appreciation and stability of the cedi and the reduction in inflation to about 3.2 percent, which have helped cushion the country.
“These gains have in themselves served to mitigate the impact of the current conflict and the price of fuel compared to what obtained in 2022,” he explained.
He attributed the fuel price increases largely to restrictions in the Strait of Hormuz, noting that about 20 percent of crude oil parcels pass through that Strait.
“What has happened is that because of restrictions in the Strait of Hormuz, the quantities of fuel that could be transported through that Strait has reduced significantly,” he said.
He added that the restrictions have caused higher crude oil prices and a significant rise in insurance premiums and other costs, contributing to the increases recorded in recent pricing windows.
To address the situation, Mr Kwakye Ofosu announced that Cabinet has directed the Ministers for Finance and Energy to take immediate steps to reduce fuel prices by removing some taxes and margins.
“The first directive that Cabinet has issued is that the Finance and Energy Ministers should take immediate steps to reduce the price of fuel through the removal of some taxes and margins on fuel, effective the next pricing window,” he said.
He explained that the reduction will initially last for four weeks, after which the situation will be reviewed.
“This is supposed to last for an initial period of four weeks. After the four weeks, the situation will be reviewed and as and when it is deemed necessary, appropriate actions will be taken,” he added.
Mr. Kwakye Ofosu further announced that Cabinet has instructed the Minister for Transport to expedite the deployment of 100 newly acquired Metro Mass buses to ease the burden on commuters.
“The Transport Minister has been instructed by Cabinet to ensure expedited deployment of these buses in high traffic corridors,” he said.
He noted that another batch of 100 buses is expected in August, with the final 100 arriving in November, bringing the total number to 300.
Mr. Kwakye Ofosu said the Transport Minister has also been tasked to ensure that Metro Mass buses maintain fares lower than those charged by private operators.
“This way, it is to ensure that Ghanaians are cushioned, especially when we reach peak periods,” he stated.
He added that President John Dramani Mahama also used the meeting to remind all ministers and senior government officials to strictly comply with his ban on fuel allowances and the use of government fuel coupons.
“The President took the opportunity at the Cabinet meeting to remind all ministers and senior government officials to adhere strictly to his ban on fuel allowances,” he said.
Government believes the measures will help stabilise fuel prices and prevent further increases from affecting transport fares and other essential commodities.
Mr. Kwakye Ofosu assured Ghanaians that government will continue to monitor developments and take further steps where necessary to protect the economy and ease the cost of living.
SOURCE: Mubarak Yakubu
