President Mahama has recommended that National Petroleum Authority (NPA) should consider what he described as a “mitigation levy” on petroleum products.
The NPA reduced fuel prices by 10% last two weeks however, the reduction has been opposed by various groups and individuals who believe the move is inadequate.
President Mahama in an interview on a Kumasi based radio station, Angel FM, said he believed the 10% is just enough, considering the fact that government still owed the Bulk Oil Distribution Companies (BDCs).
[contextly_sidebar id=”s2hPizHHslqEwLQ5VrEgb6iQ2JeHY4xS”]The NPA has so far settled only GHC 200 million out of its GHC 412 million debt owed the BDCs.
According to President Mahama, the mitigation levy will cushion users of petroleum products when price of crude begins to rise again.
“I think we need a mitigation levy so we can save for the future. I say this because the price of oil on the world market will certainly rise again. I feel that Parliament has to sit down and decide when we will save money accrued from the excess recovery. We can just decide to put in the litigation fund to reduce the effect of another increment on Ghanaians,” he said.
President Mahama added that the prices of petroleum products at the pumps may be reduced further if prices of crude oil continue to fall.
“If the argument is that because prices have fallen on the world market we should reduce fuel prices to commensurate with what pertains on the world market that will not work.The debt we owe the BDCs now is 171 million cedis so as prices drop, the NPA will sit down again and adjust the prices.”
10% fuel price reduction ‘significant’
Meanwhile President Mahma has justified the decision by the NPA to reduce fuel prices by 10 percent, describing the reduction as significant.
“On January 1st, 2014, the NPA said they had reduced fuel prices by 10 percent and if something is 100 percent and you have taken out 10 percent, is it not drastic?10 percent is very significant…,” Mahama said.
He further clarified that government is unable to settle the total debt owed the BDCs because some of the funds meant to settle such outstanding arrears are being used to undertake developmental projects.
“The money that we will use to pay that debt can be used to build a school. If Ghanaians are saying that we should reduce fuel prices drastically and use the money in government coffers to settle the outstanding debt we can do that but development will be stalled if we take such a step,” Mahama said.
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By: Marian Efe Ansah/citifmonline.com/Ghana
Follow @EfeAnsah