President John Dramani Mahama has stated that his government’s decision to introduce the Energy Sector Levy Law which culminated in an astronomical increases in taxes and subsequently affected prices of petroleum products, was a tough decision but very critical.
Addressing Parliament in a State of the Nation address on Thursday, President Mahama defended the passage of the controversial law; saying the decision was needed to protect state intuitions sinking under huge debts.
According to him, the Volta River Authority, (VRA), the Ghana Grid Company (GridCO) and the Electricity Company of Ghana, all owe colossal sum of legacy debts that could collapse Ghana’s power sector if not redeemed.
[contextly_sidebar id=”VEFHYCnfVAn2m3XtRQdaWogvoxraxcWX”]“The reality is that, while some subsidies have been paid over the years, perennial budget constraints and numerous competing demands have made it virtually impossible for successive governments to meet this obligation”, he said.
He warned that the alternative to not acting would have meant a total collapse of the power sector of the country.
He lauded parliament for passing the law, stating that the move will help Ghana solve its energy challenges permanently.
Fuel prices at the pumps went up by between 22 percent and 27 percent, following the passage of the Energy Sector Levy by Parliament in December 2015.
The price of LPG also went up by about 18 percent
The move angered labour unions, who organized its members to hit the streets in protest. But President Mahama maintained that although the law seemed to have increased the cost of living of Ghanaians, the opposite would have been far detrimental.
He stated that the move to nib the challenge in the bud, is also aimed at halting the ripple effects the debt is having on major financial institutions in the country.
By:Lawrence Segbefia /citifmonline.com /Ghana