That National Petroleum Authority (NPA) has indicated that the decision to increase the prices of petroleum products was made in the best interest of Ghanaians.<\/p>\n
The Chief Executive Officer of the NPA, Moses Asaga in an interview on the Citi Breakfast Show<\/strong> said if the increment had not been made, it would have resulted in the shortage of the petroleum products.<\/p>\n [contextly_sidebar id=”FaSAXwOvRGxWBVXhzddTxXm27Dyrgx0a”]\u201c\u2026I just want you to have confidence that we do this because we want harmony in the system, we don\u2019t want to have long queues, we don\u2019t want to have shortages,\u201d he explained.<\/p>\n The NPA has made a 9% upward adjustment<\/strong> <\/span><\/a>in the prices of petroleum products. The increment took effect on Sunday, May 17, 2015.<\/p>\n The timing of the increment<\/strong> <\/span><\/a>has been described by many as unsuitable considering the existing power crisis which has forced many businesses and households to rely on generator sets which are powered by petroleum products.<\/p>\n But according to Moses Asaga, his outfit has received signals of an imminent shortage of petroleum products because most banks were gradually withdrawing their financial support to the Bulk Oil Distribution Companies (BDCS) due to government\u2019s failure to increase prices in tandem with the world market prices.<\/p>\n \u201c\u2026so we want o forestall any imminent shortage,\u201d he said.<\/p>\n He stated that since the government only made a 10% fuel price reduction in January<\/a><\/strong><\/span> when crude oil prices on the world market was falling; the government thought it wise not to increase the prices drastically.<\/p>\n Complex pricing mechanism<\/strong><\/p>\n The NPA boss stated that the pricing mechanism for petroleum products is \u201ca bit complex.\u201d<\/p>\n \u201cIn commodity pricing, you don\u2019t buy a commodity and come and sell it cheaper than the amount that you bought it. When you do that, you will make losses\u2026so it\u2019s just a balancing act,\u201d he explained.<\/p>\n He remarked that the 9% increment is just a reflection of the recent price increases on Brent crude oil, diesel and petrol on the international market.<\/p>\n With the almost 37% and 34%, \u00a029% and 43% increment in the prices of Brent crude, diesel, petrol and LPG, Asaga argued that government could not maintain the prices on the local market.<\/p>\n \u201cIt was not something that we could wish away,\u201d he said, adding that, \u201cwhen we see that subsidies are about to be accrued, then we need to do an adjustment and the adjustment that we did culminated into the 9% increase \u2013 which means 28 pesewas on petrol and 24 pesewas on diesel.\u201d<\/p>\n Moses Asaga remarked that if government had maintained fuel prices, it would have led to the accumulation of \u201cmore subsidies for government so we thought that it was better to increase the price by the 9%.\u201d<\/p>\n \u201cOnce you start accumulating the subsidies, then banking sector will start losing confidence in the system and especially in the BDCs that are bringing in the petroleum products and that will lead to shortages.\u201d<\/p>\n He added that it is the subsidy that determines the price \u201cand once we see the subsidy level that is how then we determine the price.\u201d<\/p>\n <\/p>\n By: Efua Idan Osam\/citifmonline.com\/Ghana
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